Johnson Controls acts to facilitate A123 bankruptcy process, avoid delays by threatened actions from Wanxiang
In collaboration with A123 Systems, Johnson Controls has chosen not to be the debtor-in-possession (DIP) lender during A123’s bankruptcy process to avoid potential delays posed by threatened legal actions from Wanxiang. (Earlier post.) The parties believe this move is in the best interest of the estate by ensuring an efficient process that will best preserve value for creditors, employees and customers.
We are concerned that back-and-forth posturing by other interested parties may lead to confusion and anxiety for A123’s employees and customers and thus destroy underlying value in the estate. We have agreed to step aside as the DIP funder in order to keep the process moving and allow it to conclude in the most efficient manner possible. We want to reassure employees, customers and other stakeholders that Johnson Controls remains committed to our acquisition of A123, which will keep a source of critical jobs, intellectual property and advanced battery technology in the United States.—Alex Molinaroli, president, Johnson Controls Power Solutions
Johnson Controls maintains its $125 million offer for A123’s automotive assets as well as the stalking horse position in the bankruptcy process subject to Bankruptcy Court approval, expected on 5 November. The company also plans to expand its offer to include A123’s government business, including military contracts, during the bankruptcy process.
A123’s technology provides a combination of performance attributes that make it well suited for a range of applications, including certain automotive and military applications that are complementary to Johnson Controls’ existing portfolio.—Alex Molinaroli