Wanxiang Group, a Chinese auto parts maker, announced it plans to make a bigger bid for A123’s assets than Johnson Controls Inc.
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. Earlier this week A123 filled for bankruptcy due to quality-control issue regarding the Fisker Karma and a disappointing market for EVs.
A123 filled for bankruptcy already having an agreement with Johnson Controls, to sell its automotive operations and the two plants in Michigan for $125 million. As that agreement is subject to a court-supervised auction, Wanxiang will contest the US company as the initial bidder. In August Wanxiang Group offered A123 $465 million to help the company avoid bankruptcy, in exchange of 80% stake in the firm.
“We believe our stalking horse proposal will be materially better than Johnson Controls’,” said Guzina.
Judge Kevin Carey will rule on the initial bidder on October 30th and next week Wanxiang will submit its proposal next week. The company has to receive the approval of the Chinese government and the Committee on Foreign Investment in the US to acquire A123.