Troubled battery maker A123 is getting another lifeline. This time, from China. Wanxiang Group will invest as much as $450 million in the company, says Reuters. Wanxiang, one of the largest Chinese auto component makers. A123 will soon be Chinese.
A123, which received a $249 million grant from the Obama administration as part of a program to develop advanced lithium-ion batteries, said last month that it only had four or five months until its money would run out. A123, which had big plans for the EV industry, reported a second-quarter net loss of $82.9 million on $17 million revenues. Does not sound like the best business. Wanxiang seems to have a different perspective. Says the Wall Street Journal:
“The proposed agreement includes plans for Wanxiang to obtain convertible notes and warrants that if fully exercised could give it an 80% stake in A123. The deal is expected to close by year’s end.”
When we reported about AS123’s cash crunch, TTAC correspondent Jellodyne said:
“Romney would have closed ‘em down, sold the parts (to overseas companies) and bought the batteries from China. That’s just good business sense.”