Another day, another subsidized “green energy” firm going bankrupt. This time it’s A123 Systems Inc., a Massachusetts-based manufacturer of batteries for electric cars that received about $500 million in state and federal assistance, including a $249-million grant from the U.S. Department of Energy (DOE).
A123, which has tumbled in value from $2.3 billion to just $11 million, filed for bankruptcy in Delaware on October 16 after missing an interest payment on $143.8 million of debt. The company said it plans to sell its assets to Johnson Controls Inc. of Milwaukee, Wisconsin.
“This action is expected to allow the company to provide for an orderly sale of the automotive business assets and all other assets and business units,” A123 said in a press release.
If the court approves the sale, Johnson will “acquire A123’s automotive business assets, including all of its automotive technology, products and customer contracts; its facilities in Livonia and Romulus [Michigan]; its cathode powder manufacturing facilities in China, and A123’s equity interest in Shanghai Advanced Traction Battery Systems Co., as part of the $125 million deal,” according to the Detroit News.
As The New American recently reported, A123 had announced a deal with Wanxiang Group Corporation that would have seen the Chinese auto parts maker invest up to $465 million in A123 and take control of its operations. That deal, however, fell through “as a result of unanticipated and significant challenges to its completion,” according to A123 CEO David Vieau.
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