Chinese auto parts manufacturer Wanxiang Group said it still wants to buy part of battery supplier A123 Systems, even after Johnson Controls acquired the auto-related assets of the bankrupt company.
Back in August, Wanxiang said it would invest $465 million for up to 80 percent of A123 Systems, but the deal failed as A123 went into bankruptcy protection on Tuesday. “Our interest and goal remains the same,” Wanxiang America President Pin Ni was quoted as saying by the Detroit Free Press. Johnson Controls is paying $125 million for A123’s auto battery plants in Livonia and Romulus and its technology.
According to Chapter 11 bankruptcy, proposed sales must be approved by a judge who generally awards assets to the highest bidder with the goal of returning money to creditors. Wanxiang faces additional obstacles that Milwaukee-based Johnson Controls would not encounter.
For instance, Wanxiang would need to gain approval to acquire A123 from the U.S. Committee of Foreign Investment in the U.S. Also, several Republican members of Congress raised national-security questions about Wanxiang’s original agreement to acquire A123.
A123’s most-valuable assets are its plants in Livonia and Romulus, current battery contracts and intellectual property, which includes nanophosphate lithium battery technology and a battery-pack cooling technology.