Battery maker A123 Systems (Nasdaq: AONE) has entered into an asset purchase agreement with Johnson Controls Inc. (NYSE: JCI), which will purchase its automotive business assets. To facilitate that purchase, A123 and its U.S. subsidiaries have voluntarily filed for Chapter 11 bankruptcy Oct. 16.
The asset purchase agreement also includes provisions through which Johnson Controls intends to license back to A123 certain technology for its grid, commercial and government businesses. A123 said it is involved in active discussions regarding strategic alternatives for its grid, commercial, government and other operations.
In addition to the purchase agreement, Johnson Controls will provide $72.5 million in debtor possession financing to support A123’s continued operations throughout the sale process.
A123 supplied lithium ion batteries to be used for energy storage on several wind and solar power projects, including the 21 MW Auwahi wind project in Hawaii and a planned 500 kW photovoltaic array in California. The company was awarded a $249 million grant from the U.S. Department of Energy in 2009, but only received $132 million of the funds. A123 also signed definitive agreements in August for Wanxiang Group Corp. to invest up to $465 million with an initial credit extension of $25 million.
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