A123 may have declared in its bankruptcy filing this week that it has chosen U.S.–based Johnson Controls, rather than Chinese rescuer Wanxiang, as the preferred bidder for its automotive battery business. But that doesn’t mean that Wanxiang is letting go of its $465 million bid to buy A123 outright.
That’s the upshot of a Thursday appearance by Wanxiang North American operations head Pin Ni in the federal bankruptcy court in Delaware that’s going to arrange the future of A123’s assets and business lines. The Waltham, Mass.-based advanced lithium ion battery maker filed for bankruptcy protection on Tuesday, and also announced that it had reached a deal with Johnson Controls to buy its automotive battery business, including its federal grant-backed factories in Michigan, for $125 million.
But Ni told the court that “our interest and goal remain the same,” in terms of Wanxiang’s plan to take an 80-percent ownership stake in A123. That deal was reached in August, when A123 was struggling under consistent losses since its 2010 IPO, as well as a massive battery recall involving key customer Fisker Automotive. Indeed, Ni was quoted in news reports saying that A123’s bankruptcy only makes it a more attractive target.
The idea of a Chinese company taking over taxpayer-backed U.S. technology led to immediate criticisms on Capitol Hill, and Wanxiang’s structured deal with A123 did involve it retaining access to the $249 million Department of Energy stimulus loan that’s helped build A123’s factory in Livonia, MIch., as well as ownership of A123’s intellectual property.
A123 CEO David Vieau said in a Tuesday statement on the company’s website that “We determined not to move forward with the previously announced Wanxiang agreement as a result of unanticipated and significant challenges to its completion,” though his statement didn’t specify the challenges involved.
Here’s our previous coverage of the A123 bankruptcy, starting with the political fallout: