A123 Systems Receives Interim Court Approval Of $50 Million DIP Financing
A123 Systems, Inc.(Nasdaq: AONE) ("A123" or "the Company"), a developer and manufacturer of advanced Nanophosphate® lithium iron phosphate batteries and systems, announced that the United States Bankruptcy Court for the District of Delaware (the "Court") has granted A123 interim approval to use $50 million of Debtor-in-Possession ("DIP") financing, which is being provided by Wanxiang Group Corporation ("Wanxiang"). The financing supplements the pre-petition $22.5 million of liquidity and letter of credit support that Wanxiang provided to A123, which will remain in place.
The hearing on bidding procedures with regard to the previously announced asset purchase agreement with Johnson Controls, Inc. (NYSE: JCI) that was initiated on Monday, November 5, 2012, has been adjourned until a hearing scheduled for November 8, 2012. Johnson Controls consented to adjourn the hearing on this motion so A123 and Johnson Controls could continue discussions with the recently formed Official Committee of Unsecured Creditors and attempt to resolve consensually any potential issues regarding the bidding procedures.
"We are pleased that the Court has granted A123 interim approval for the DIP financing agreement," said Dave Vieau, Chief Executive Officer of A123. "The DIP financing will allow A123 to operate our businesses and provides additional operational and financial stability as we proceed with the transaction process. It is important to note that being the DIP provider does not give Wanxiang or any other party control over or leverage in A123's court-supervised sale process. As we move through the transaction process, we will continue to act in the best interests of A123, its employees and its other stakeholders."