A123 Systems asked a judge approve a $50 million loan from Wanxiang America Corp instead of Johnson Controls Inc.
At a hearing on November 5th, A123 will seek approval for Wanxinag’s financing, which already made a loan of $22.5 million to the maker of electric-car batteries on October 16th, before it entered bankruptcy. On October 18th, Johnson Controls received interim court approval to offer A123 a loan of $15.5 million from the total of $72.5 million. Although Johnson Controls agreed to buy A123’s automotive business, offering $125 million, it withdrew as the lender and therefore avoid a fight over the financing.
Two weeks ago Bojan Guzina, Wanxiang Group’s attorney, said the company not only plans to make a bigger bid at the auction for A123, but it also plans to fight the US company for the role of initial bidder for A123. The company filled for bankruptcy already having an agreement with Johnson Controls, to sell its automotive operations and the two plants in Michigan for $125 million, but since this deal is subject to a court-supervised auction, Wanxiang will contest the US company as the initial bidder.
“We believe our stalking horse proposal will be materially better than Johnson Controls’,” said Guzina.