By Saabira Chaudhuri
A123 Systems Inc. (AONE) said it has received interim approval
to use $15.5 million of financing from Johnson Controls Inc. (JCI)
to help support its business.
The court granted A123 permission, on an interim basis, to use
the funds from a $72.5 million pool of debtor-in-possession
financing from Johnson.
A court hearing for final approval of the debtor-in-financing
has been scheduled for Oct. 30. The company also received approval
to, among other things, continue paying employee wages, salaries,
benefits and other employee obligations.
The electric-car-battery manufacturer filed for Chapter 11
bankruptcy protection Tuesday with a plan to sell its auto-business
assets to U.S. rival, Johnson Controls, scrapping a proposed rescue
by Chinese auto-parts maker Wanxiang Group Corp.
But then on Thursday, Dow Jones reported that a bidding war for
A123 had broken out in bankruptcy court, as a lawyer for Wanxiang
said his client still wants to purchase the Massachusetts-based
electric battery maker despite a $125 million offer from
Johnson.
The bankruptcy filing of A123, which received nearly $250
million in federal-government grants and $358 million in start-up
funding, represents a setback for the Obama administration's
efforts to foster a market for electric vehicles and develop a
homegrown supply of advanced batteries.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
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