A123 Gets $15.5M Funding Approval
Days after announcing that it filed for Chapter 11 bankruptcy protection, lithium-ion battery maker A123 has received approval from a bankruptcy court to use $15.5 million in funding to continue operating.
According to Waltham-based A123, which has operations in Westborough and Hopkinton , a U.S. bankruptcy court in Delaware tentatively approved the company's use of $15.5 million of its $75.5-million debtor-in-possession financing from Johnson Controls. Last week, A123 announced that Johnson was purchasing its automotive operations in Michigan, cathode power manufacturing facilities in China and A123's equity interest in Shanghai Advanced Traction Battery Systems, the company's joint venture with Shanghai Automotive in China.
The court also granted A123 approval to continue paying employees' wages and benefits. A court hearing scheduled for Oct. 30 will determine final approval of the financing deal.
A123 said it's taking part in discussions regarding "strategic alternatives" for its grid, commercial, government and other operations as well, and is seeing interest in those businesses.
News of the company's bankruptcy protection filing and deal with Johnson Controls came with word that a controversial deal with Chinese firm Wanxiang had fallen through. Wanxiang had planned to take a majority stake in A123, infusing it with up to $423 million. The deal had sparked criticism of the Obama administration, which had given A123 $249 in stimulus money. Lawmakers and others feared the deal with Wanxiang would allow U.S. government funding to go overseas and that the Chinese company would take intellectual property and manufacturing jobs with it.
Image credit: FreeDigitalPhotos.net.
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