A123 Files For Bankruptcy, Johnson Controls To Take Over
Reuters reports that battery maker A123 Systems is filing to bankruptcy protection in Delaware.
The company has received cash infusions from China earlier this summer, and its financial situation has been precarious, to say the least. Political controversies were also part and parcel of the story, as with any green energy project today, and A123 received a $249 million dollar grant from the Obama administration in 2009. A123 supplied battery technology to Fisker and General Motors.
UPDATE:
Johnson Controls will be purchasing the remnants of A123, while providing $72.5 million in funding to help A123 continue operations as it goes through bankruptcy proceedings.
Crain’s Detroit Business is reporting that
Under the deal, the Waltham, Mass-based A123 will pay to license technology its own grid, commercial and government technologies from JCI.
Presumably, A123’s brand will carry on under the JCI empire. That won’t do much for the beleaguered battery company, which apparently posted 14 consecutive losing quarters, and has $376 million in debt versus $459.8 million in assets. In the filing, A123 noted
“The company may not have sufficient cash to fund operations and may need to seek the protections provided under the U.S. Bankruptcy Code…No assurance can be given that the company will be able to avoid restructuring, reorganization, or a bankruptcy filing.”
More by Derek Kreindler
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Good thing Johnson Controls is there to keep the lights on at A123, but it probably won't be the same company once the dust settles.
this is a political rant pretending to be a car blog.