A123 Systems, a struggling battery manufacturer in the market has won a $465 million rescue from Wanxiang Group Corp., a Chinese auto parts maker.
A123 Systems had already received a quarter billion dollar grant for green technology from Obama administration. The struggling battery manufacturer has said that the planned investment comprises of $25 million initial credit extension that the company expects to receive this week. Rest will come with a mix of bridge finance along with warrants and convertible notes due to several conditions that are to be met.
This good amount of money means a lot for the company at this stage where it can keep building batteries for electric and hybrid vehicles. A123 in last month revealed that it is only left with five months of cash and now this rescue will support the company to produce batteries for several projects.
A123 also said that if all the notes and warrants are converted into shares then Wanxiang will hold 80 percent of the firm. A123 has signed an agreement that carries non-binding memorandum of understanding.