A123 finally runs out of juice and files for bankruptcy

Battery maker A123 Systems announced that it has filed for Chapter 11 bankruptcy, and agreed to sell its automotive business assets to Johnson Controls. Once considered a promising startup with innovative technology, the company took a huge hit in March, when it was forced to recall a batch of defective batteries destined for Fisker’s Karma PHEV. In August, it looked as if Chinese auto parts giant The Wanxiang Group might save A123 from the jaws of bankruptcy, but that deal seems to have fallen through.

“We believe the asset purchase agreement with Johnson Controls, coupled with a Chapter 11 filing, is in the best interests of A123 and its stakeholders at this time,” said CEO David Vieau. “We determined not to move forward with the previously announced Wanxiang agreement as a result of unanticipated and significant challenges to its completion. Since disclosing the Wanxiang agreement, we have simultaneously been evaluating contingencies, and we are pleased that Johnson Controls recognizes the inherent value of our automotive technology and automotive business assets. We are also pleased that we have received indications of interest that recognize the value of our grid and commercial businesses. We are encouraged by the significant interest we have received, as multiple parties have submitted proposals for these businesses. As we move through this transaction process, we expect to continue operating and working with customers and suppliers.”

“Our interest in A123 Systems is consistent with our long-term growth strategies and overall commitment to the development of the advanced battery industry,” said Johnson Controls President Alex Molinaroli. “Requirements for more energy efficient vehicles continue to increase, which is driving automotive manufacturers to pursue new technologies across a broad spectrum of powertrains and associated energy storage solutions. We believe that A123’s automotive capabilities are a good complement to our existing portfolio and will further advance Johnson Controls’ position as a market leader in this industry.”

 

Source: A123