Electric Car Battery Maker A123 FIles for Bankrupcy

 

A123 Systems Inc. fell as much as 16 cents, or 70 percent, to 7 cents a share in over-the-counter trading as of 9:43 a.m. Photographer: Jeffrey Sauger/Bloomberg

 

The filing may fuel a debate over government financing of alternative-energy and transportation businesses. Federal grants and loans to companies including A123, Fisker Automotive Inc. and Tesla Motors Inc. (TSLA) have drawn scrutiny from congressional Republicans following the September 2011 bankruptcy filing of solar-panel maker Solyndra LLC two years after it received a $535 million loan guarantee from the U.S. Energy Department.

“This action is expected to allow the company to provide for an orderly sale,” A123 said in a press release. Johnson Controls plans to acquire A123’s automotive-business assets in a deal valued at $125 million and will provide financing of $72.5 million to support A123’s operations, according to the release. A deal to sell a majority stake to a Chinese company fell through, A123 said.

The Energy Debate Continues at www.bloomberg.com/sustainability

The company listed assets of $459.8 million and debt of $376 million as of Aug. 31 in Chapter 11 documents filed today in U.S. Bankruptcy Court in Wilmington, Delaware.
The Waltham, Massachusetts-based company said yesterday it expected to fail to make an interest payment due yesterday on $143.8 million of notes expiring in 2016.

Largest Shareholders

A123’s largest shareholder is Heights Capital Management Inc. of San Francisco, with 12.5 million shares, or a 7.3 percent stake, according to data compiled by Bloomberg. IHI Corp., based in Tokyo, has 8.45 million shares, or about 5 percent, and General Electric Co., based in Fairfield, Connecticut, holds 7.37 million shares, or about 4.3 percent.

The 30 largest consolidated creditors without collateral backing their claims are owed a total of more than $161 million, according to court papers. U.S. Bank NA, as trustee, is listed as the largest unsecured creditor with a claim of $142.8 million, according to court papers. Hudson Bay Capital Management LP has a claim of $2.8 million, Jabil Circuit Inc. has a claim of $1.7 million and Hydro Quebec has a claim of $1.5 million.

Via: Bloomberg

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