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.