A lawyer for Wanxiang
Group Corp, a Chinese auto parts manufacturer said on Thursday that he is
planning on making a higher bid for the battery business of A123 Systems,
Inc.(NASDAQ:AONE) than what a US company has offered.
Wanxiang plans on
placing a bid at the auction for A123 that has filed for bankruptcy earlier
this week, as told by Bojan Guzina in a court hearing in Delaware. The Chinese
company also intends to fight Johnson Controls for the role of initial bidder
for A123, as the attorney said.
A123 is a maker of
lithium-ion batteries that are used in electric and hybrid vehicles. It had
declared bankruptcy among a backdrop of quality-control issues and a troubling
market for electric automobiles. The company had won a $249 million US
government grant in 2009.
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Wanxiang has been
following A123 for months. The bankruptcy came after a $465 million rescue
agreement by the Chinese company loosened after the US battery manufacturer was
not able to meet certain conditions on the contract.
Guzina said that his
client feels it has been left at the altar for a couple of times. Guzina is
from a law firm named Sidley Austin that is standing up for Wanxiang.
A123 declared
bankruptcy with an agreement to sell its automotive operations that include two
factories in Michigan, to Johnson Controls based in Milwaukee in lieu of $125
million.
The deal is subject to
an auction supervised by the court and Wanxiang intends to rival Johnson
Controls as the first border or stalking horse in the sale process. Funds that
are collected in the auction are supposed to go to repaying A123’s creditors.
Guzina said he believes
that Wanxiang’s proposal for stalking horse will be materially a better option
than Johnsons Controls.
A spokesman for
Johnsons Controls did not reply to a request seeking comment.
Shares of AONE have
bounce back 120% in the past two weeks after slumping 80% earlier in the week.
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