The lithium-ion battery maker, subsidized by a $249.1 million grant from the U.S. Department of Energy, filed for Chapter 11 protection Oct. 16 in U.S. Bankruptcy Court in Delaware after losses
totaling $857 million.
However, A123 will hold an auction Nov. 19 in Chicago at which potential buyers can outbid JCI's $125 million for A123's automotive assets, including its North American plants in Livonia and Romulus, experts say.
On the list of bidders are SK Group, Samsung SDI, Hitachi Ltd., LG Chem Ltd. and Panasonic Corp., said Michael Lew, senior analyst covering A123 for New York City-based Needham & Co.
Bidders could be getting A123's assets and intellectual property on the cheap, Lew said.
Waltham, Mass.-based A123 has used only $132 million of its $249.1 million loan from the DOE, and the government arm hasn't ruled out allowing the next buyer to use the remaining $117.1 million of the grant.
If JCI's bid is approved, it could get A123 for a net swing of $7.9 million.
"This is still the easiest path; why not buy something pre-built and let it sit there for years at that price?" Lew said. "There's nothing wrong with the technology; A123 isn't a failure, it's just financially challenged and possibly the right play for another company."
Chinese supplier Wanxiang Group Corp. also maintains its interest in A123 and is entering a new bid to acquire it for $758 million, according to court documents. Wanxiang originally signed a deal in August to provide A123 with $465 million in financing for an 80 percent stake. But the deal required approval from the U.S. and Chinese governments and faced opposition from Republican legislators, killing the deal in a contentious presidential election year.
This is great news but is there any chance our shares would be worth anything or are they already wiped out due to the Chapter 11 filing?
My head hurts from what happened here, and everywhere I look there are conflicting views.
The closest actual case I could find was the Oneida case where the stockholders challenged the bankruptcy and still lost everything:
"SHERRILL - The latest happenings in the Oneida Ltd. bankruptcy case include the formation of an equity committee, which will likely contest the bankruptcy and the implementation of stock-trading restrictions."
NICE The latest happenings in the Oneida Ltd. bankruptcy case include the formation of an equity committee, which will likely contest the bankruptcy and the implementation of stock-trading restrictions." WAXIANG UPPED THEIR BID!