A123 Systems gets financing from Johnson Controls
The court granted A123 interim approval to use $15.5 million of its $72.5 million debtor-in-possession financing from Johnson Controls to support the company's operations throughout the transaction process
Waltham, Mass., October 19, 2012 — A123 Systems Inc., a developer and manufacturer of advanced Nanophosphate lithium iron phosphate batteries and systems, announced that the U.S. Bankruptcy Court for the District of Delaware granted the company's request for certain "first day" orders that help support its business.
The court granted A123 interim approval to use $15.5 million of its $72.5 million Debtor-in Possession (DIP) financing from Johnson Controls to support the company's operations throughout the transaction process.
A court hearing for final approval of the DIP has been scheduled for October 30, 2012. The company also received approval to, among other things, continue paying employee wages, salaries, benefits and other employee obligations.
As previously announced, A123 entered an asset purchase agreement with Johnson Controls, in which Johnson Controls expects to acquire A123's automotive business assets. A123 also continues to engage in active discussions regarding strategic alternatives for its grid, commercial, government and other operations, and has received several indications of interest for these businesses.
To facilitate the transaction process, A123 and all of its U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. The company's subsidiaries located outside the U.S. were not included in the filings.
Latham & Watkins LLP and Richards, Layton & Finger are serving as legal advisors, Lazard is serving as financial advisor, and Alvarez & Marsal is serving as restructuring advisor to A123.