Court Grants A123 Systems Interim Approval of $50MM DIP Financing
A123 Systems, a developer and manufacturer of advanced lithium iron phosphate batteries and systems, announced that the United States Bankruptcy Court for the District of Delaware has granted A123 interim approval to use $50 million of debtor-in-possession (DIP) financing, which is being provided by Wanxiang Group. The financing supplements the pre-petition $22.5 million of liquidity and letter of credit support that Wanxiang provided to A123, which will remain in place.
The hearing on bidding procedures with regard to the previously announced asset purchase agreement with Johnson Controls, Inc. that was initiated on Monday, November 5, 2012, has been adjourned until a hearing scheduled for November 8, 2012. Johnson Controls consented to adjourn the hearing on this motion so A123 and Johnson Controls could continue discussions with the recently formed Official Committee of Unsecured Creditors and attempt to resolve consensually any potential issues regarding the bidding procedures.
“The DIP financing will allow A123 to operate our businesses and provides additional operational and financial stability as we proceed with the transaction process,” Dave Vieau, A123 CEO said. “It is important to note that being the DIP provider does not give Wanxiang or any other party control over or leverage in A123’s court-supervised sale process.”
Previously, Bloomberg reported that Wanxiang America was interested in being the lead bidder for A123’s assets.
A123 Systems is an advanced lithium iron phosphate batteries and energy storage systems developer and manufacturer for transportation, electric grid and commercial applications.
Previously on abfjournal.com: