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A123 Systems, Inc. (NASDAQ:AONE) to approach court for loan from Wanxiang

Electric car-battery maker A123 Systems, Inc.(NASDAQ:AONE), which is currently following bankruptcy proceedings, pans to approach the court seeking approval for a loan from China's Wanxiang Group Corp.

Johnson Controls, which has made a bid to acquire the automotive assets of the company, said that it would withdraw its prior loan commitment to A123.

A123 had filed for bankruptcy a couple of weeks back and Johnson Controls had offered it an interim loan as part of the restructuring of the company.

But subsequently A123 filed papers in court on Friday and said that it had reached an agreement with Wanxiang Group for a replacement loan.

In a statement released late on Friday, Johnson Controls said it is withdrawing the debtor-in-possession (DIP) loan to avoid delays to the bankruptcy process.

"Johnson Controls has chosen not to be the debtor-in-possession lender during A123's bankruptcy process to avoid potential delays," Johnson Controls said in the statement.

Both Johnson Controls and Wanxiang are fighting for control over the bankrupt auto parts firm.

A debtor-in-possession or DIP gives the lender more strategic leverage over the bankrupt company and gives it liberty to demand asset sales as well as set timelines and deadlines for the bankruptcy proceedings.

By withdrawing from the DIP loan, Johnson Controls is effectively ceding advantage to the Chinese company. However Johnson has said that it will maintain its $125 million bid for A123's automotive assets.

A123 declared bankruptcy amid a disappointing market for electric vehicles and after it had to recall battery packs made for Fisker Automotive, which made up 26 percent of A123's revenue in 2011.

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A123 Systems, Inc. (NASDAQ:AONE) Executives Ask More Bonuses Despite Bankruptcy

A123 Systems, Inc. (NASDAQ:AONE), Taxpayer stimulus waster has declared financial bankruptcy. The interesting part is that the executives of the company apparently getting driven to bankruptcy as well.

CEO David Viaeu and his lieutenants have run the company into the ground after receiving more than $279 million in Recovery Act funds and minimum $135 million from Michigan taxpayers. Yet, they have asked a bankruptcy court judge to receive up to $4.2 million in executive and withholding bonuses to see through the conquest of the company, probably by Johnson Controls.

NLPC has detailed the expedient nature of the leadership of A123 in the month of February. At the time A123 had unwaged 125 workers in the month of November at its two plants in Romulus and Livonia, Michigan. Officials of the company said waning production by A123’s top customer, Fisker Automotive, has resulted in cutbacks. A123 had expectations of delivering batteries for 7,000 plug-in hybrid Fisker Karma models. However, defective wire harnesses in the vehicles reduced Fisker’s production to 1,500 for the year 2011. Also, in December, A123 has to mend dozens of batteries that had been fixed in Karmas due to the possibility for coolant leaks. At that time, Wall Street analysts and Forbes magazine had posted that A123 experienced a doomsday scenario and that together with Fisker they might make up two Solyndras for the cost of one.

Despite the blunders and failures, company directors awarded top executives with big salary perks on 8^th February despite a sharp downward course in its stock price after DOE cut Fisker off. Chief Financial Office, David Prystash was bumped 27% to $380,000 while Robert Johnson, VP of Energy Solutions, got an increase of 51% from his base salary.

A123’s compensations committee of its Board of Directors has modified payment terms of its top officers should control of the company change hands.

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A123 Systems, Inc. (NASDAQ:AONE)’s automotive operations goes out for sale, Shares Recover

Shares of A123 Systems, Inc.(NASDAQ:AONE) jumped another 54% to $0.19 in Monday’s session, extending its recovery to 280% from the recent low of $0.05.

The automotive operations of A123 Systems, Inc.(NASDAQ:AONE) will be bought by Johnson Controls Inc. The battery maker will be acquiring not just the business assets but also the customer contacts, products and the automotive technology from the Waltham, Massachusetts based company, which specializes in making lithium-ion batteries.

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The Milwaukee, Wisconsin based company will also be getting the company’s Livonia and Romulus facilities in Michigan, the china-based facilities which manufacture cathode power Shanghai Advanced Traction Battery Systems Co.’s equity interests, and the joint venture between A123 Systems and Shanghai Automotive Industry Corporation. The whole deal will cost Johnson Controls about $125 million. Petitions for reorganization under the U.S Bankruptcy Code have already been filed by the company, and its subsidiaries. The company will be receiving an additional amount of $72.5 million, to help the company on, while the sales are still going on. This will be done on the basis of Johnson Controls being a debtor in possession.

Since according to the deal and the legalities, the acquisition of A123 Systems is subject to an auction which is to be supervised by the court, the Chinese company, Wanxiang Group wants to buy the business in sale. Wanxiang Group wants to place a higher bid to acquire the company but before the Chinese company puts forward the proposals, it will have to receive the approvals required for the proposals from the Chinese Government, as well as from the Committee on Foreign Investment in the U.S. it is interesting to not that A123 Systems had recently been unable to meet up to orders by Wanxiang Group, worth about $465 million, by failing to get the required permits which were a part of the order.

The company had been facing a bad time due to lower number of orders from its chief client, Fisker Automotive. There was less of a demand for hybrids than has been expected, and the company was struggling with finances. However, Johnson Controls is confident about the acquisition because the company believes that alternative technologies and sources of power will soon be in great demand. The acquisition will help spruce up the company’s portfolio, and it will also help with marketing.

A123 Systems, Inc. (NASDAQ:AONE) shares posted Another double Digit Gains

Shares of A123 Systems, Inc.(NASDAQ:AONE) jumped another 54% to $0.19 in Monday’s session, extending its recovery to 280% from the recent low of $0.05.

Battery maker Johnson Controls will be buying the automotive operations of lithium-ion battery maker A123 Systems for $125 million.

According to the agreement between the two companies Johnson Controls will acquire A123's automotive business assets, including automotive technology, products and customer contracts.

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Johnson Controls will also buy A123’s facilities in Livonia and Romulus, Michigan; cathode powder manufacturing facilities in China; equity interest in Shanghai Advanced Traction Battery Systems Co.; as well as its joint venture with Shanghai Automotive Industry Corporation, a statement from the company said.

A123 and its subsidiaries have filed petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court, Zacks Equity Research said.

The company is expected to receive $72.5 million from Johnson Controls as “debtor in possession” financing to support its operations during the sale process.

Meanwhile China's Wanxiang Group is also making a fair bid for A123's assets though it is yet to get the nod from the Committee on Foreign Investment in the U.S. and the government of China for the acquisition.

A123's woes started when it was unable meet the requirements of its main customer Fisker Automotive and also had to deal with costly recalls of its battery packs.

A failed $465 million with Wanxiang earlier, where the Chinese company was to infuse cash into the ailing battery maker worsened matters. Weak demand for its hybrid batteries forced the company into bankruptcy.

A123 Systems, Inc. (NASDAQ:AONE) Receives Court Approval Of ‘First Day’ Motions

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 30^th 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.

A123 Systems, Inc. (NASDAQ:AONE): Chinese Auto Parts Maker Plans To Crest Johnson Deal

A lawyer for Wanxiang Group Corp, a Chinese auto parts manufacturer said on Thursday that he is planning on making a higher bid for the battery business of A123 Systems, Inc.(NASDAQ:AONE) than what a US company has offered.

Wanxiang plans on placing a bid at the auction for A123 that has filed for bankruptcy earlier this week, as told by Bojan Guzina in a court hearing in Delaware. The Chinese company also intends to fight Johnson Controls for the role of initial bidder for A123, as the attorney said.

A123 is a maker of lithium-ion batteries that are used in electric and hybrid vehicles. It had declared bankruptcy among a backdrop of quality-control issues and a troubling market for electric automobiles. The company had won a $249 million US government grant in 2009.

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Wanxiang has been following A123 for months. The bankruptcy came after a $465 million rescue agreement by the Chinese company loosened after the US battery manufacturer was not able to meet certain conditions on the contract.

Guzina said that his client feels it has been left at the altar for a couple of times. Guzina is from a law firm named Sidley Austin that is standing up for Wanxiang.

A123 declared bankruptcy with an agreement to sell its automotive operations that include two factories in Michigan, to Johnson Controls based in Milwaukee in lieu of $125 million.

The deal is subject to an auction supervised by the court and Wanxiang intends to rival Johnson Controls as the first border or stalking horse in the sale process. Funds that are collected in the auction are supposed to go to repaying A123’s creditors.

Guzina said he believes that Wanxiang’s proposal for stalking horse will be materially a better option than Johnsons Controls.

A spokesman for Johnsons Controls did not reply to a request seeking comment.

Shares of AONE have bounce back 120% in the past two weeks after slumping 80% earlier in the week.

Electric Cars Face Yet another Roadblock due to A123 Systems, Inc. (NASDAQ:AONE) Mess

Sometime back, A123 Systems, Inc.(NASDAQ:AONE) was favorably viewed as a company that was going to change the face of the auto industry by providing Americans with battery-powered cars. However, after the initial, hullabaloo over electric cars died down, several factors surfaced such as development slowing down due to unexpected issues with battery technology, concerns about vehicles that might leave consumers stranded after the battery runs out, and astronomical expenses of electric cars.

The company filed for Chapter 11 bankruptcy on Tuesday. It had begun well by manufacturing lithium-ion batteries for power tools, and using this leverage had tried to generate large packs of batteries for vehicles. Big players like General Electric were interested and a grant from the US Government to build a plant in Michigan was also approved in 2009.

The Obama administration, about 3 years back, had set a target that one million electric or plug-in vehicles will be out on American roads by 2015. The goal was way too optimistic to be achieved, given the financial and other types of constraints. Nissan and General Motors have sold 9,674 Leaf electric cars and 7,671 rechargeable Volt compacts, which is a drop in the bucket comprising 12.8 million light vehicles.

A123 Systems, Inc. (NASDAQ:AONE) shares Bounces Back After The Recent Slump, Up 36%

Shares of A123 Systems, Inc.(NASDAQ:AONE) were up 36.63% to $0.750 after slumping 80% in the past couple of trading sessions.

A123 Systems, Inc.(NASDAQ:AONE), electric car battery maker, which filed for bankruptcy this week, has been held up by Republicans as a failure of the economic policies of the Obama Administration.

According to an analysis done by Bloomberg, while the company had marquee customers and a promising future, its problems were a result of its missteps in manufacturing.

About three years back the Obama administration had pledged nearly $250 million in grants to provide financial help and also to assist it in bringing back jobs and factories back to the U.S.

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Bloomberg said that the company had produced faulty batteries "that forced its main customer, Fisker Automotive Inc., to recall hundreds of $103,000 cars."

However the technology owned by the company will not disappear as Johnson Controls, an auto parts maker, has offered to buy A123's auto-battery business.

"The bankruptcy followed A123’s attempt to sell a controlling stake to a Chinese company, an effort that fell apart amid scrutiny by congressional Republicans. The offer from Johnson Controls has to be approved by a U.S. Bankruptcy Court and could be topped by a rival bidder," Bloomberg said in its analysis.

In the U.S. there are too many electric car battery makers while the demand for electric cars is low, people still preferring to drive around in gasoline-guzzling more powerful vehicles.

However considering the backing that A123 got with the government, it surprised many that the company still went under.

A123 Systems, Inc. (NASDAQ:AONE) Tumbles on Bankruptcy, Basic Energy (NYSE:BAS) Trims outlook

Shares of Basic Energy Services, Inc(NYSE:BAS) rose 18 cents, or 1.59 percent, to $11.48. Lowering the third quarter revenue forecast was the company with a weaker than expected September results.

The company received a subpoena from the Securities and Exchange Commission on Monday. In a regulatory filing the company said that SEC is investigating whether there is any violation of federal security laws while reporting its June operating data. The company plans to fully cooperate with the SEC inquiry.

Maintaining the guidance for the fourth quarter revenue to fall 3 to 5 percent, it changed its third quarter revenue outlook. It expects to drop 5 to 6 percent from second quarter and increase from its previous forecast drop of 3 percent.

Moreover the rig utilization rate even dropped because of fewer working days and inclusion of the Labor Day holiday.

Further there was a decline in drilling rig days for September because of delay at some of its rigs and majorly because it used one of its rig on internal project.

A123 Systems, Inc.(NASDAQ:AONE) on Tuesday filed for bankruptcy protection and sold its automotive assets following short of cash and weak sales of electric cars.

The news came a day after the company alerted of its miss in debt payments and that it could be head for restructuring under Chapter 11. The company is yet to post profit and has lost $83 million in second quarter. Just two months ago did the company announced of a $450 million lifeline from Wanxiang Group Corp which it now terms to be over.

Under chapter11 the company received a federal grant of $249 million which it is not required to repay but has to match it. Till date it has drawn about $129 million of the grant said spokesman Dan Borgasano.

Johnson Controls will get A123's automotive assets for $125 million, including lithium-ion battery technology, products and customer contacts. It will also take over the factories in Michigan, cathode ray factories in China and an equity interest in a Chinese battery company.

The business such as grid, commercial, government and other operations which were not purchased by Johnson Controls are under process to be sold said A123.

A123's stock once traded for more than $20 on the day of its initial public offering in 2009 fell to 6 cents in afternoon trading down 75%.

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