A123 Systems, Inc.(NASDAQ:AONE) has announced that the US Bankruptcy Court for District of Delaware has approved its request for particular ‘first day’ order that aid in supporting its business.
A123 Systems is a developer and maker of advanced Nanophosphate lithium iron phosphate systems and batteries that are used for transportation, commercial applications and electric grid. A123 influences breakthrough technology, expert systems integration and high-quality manufacturing. The company’s proprietary Nanophosphate lithium ion phosphate technology is built on novel nanoscale materials that are developed at Massachusetts Institute of Technology.
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The court has approved A123’s request to use $15.5 million out of its $72.5 million DIP (Debtor-in-Possession) financing from Johnson Controls in order to support the operations of the company throughout the transaction process. A court hearing for final grant of the DIP has been slated for 30th October, 2012. The company has also received grant to continue paying salaries, benefits, employee wages and other employee obligations.
As mentioned earlier, A123 had entered an asset purchase agreement with Johnson Controls. The latter expects to gain access to automotive business assets of A123. A123 also keeps on engaging in active discussions related to strategic substitutes for its commercial, grid and other operations. It has received a number of indications of interest for these businesses. To help the transaction process, A123 and all of its subsidiaries in the US have filed voluntary petitions for reorganization under Chapter 11 of the US Bankruptcy Code. The subsidiaries of the company that are located outside the US were not included in the filings.
Additionally, including the terms of the updated DIP agreement of the company with Johnson Controls is expected to be filed soon. It is available on the website of A123. For accessing court documents and other information, one can view Logan and Company’s website.
Shares AONE slumped about 50% during the past week after bouncing back about 150% from its all time low of $0.05.