A123 Systems Finds a Financial Lifeline in China
The financially strapped lithium ion battery maker signs an understanding to get an investment of up to $450 million from a Chinese auto components maker.Battery maker A123 Systems announced today it has reached a deal which could lead to up to a $450 million investment from Chinese auto parts maker Wanxiang.
US Battery Maker A123 will get up to $450 million Wanxiang Group Corporation for up to 80% of the shares
A123 Systems, a developer and manufacturer of advanced lithium-iron phosphate batteries and systems, signed a non-binding memorandum of understanding (MOU) with Wanxiang Group Corporation establishing the framework for a strategic investment through which Wanxiang would invest up to $450 million in A123.A123 announced the Wanxiang deal along with its financial results for the second quarter ended 30 June 2012 in which the company reported a net loss of $82.9 million (a 50% increase in loss compared to a net loss of $55.4 in 2Q 2011) on total 2Q 2012 revenue of $17.0 million (a decrease of 53% from $36.4 million in the second quarter of 2011).
Wanxiang is China’s largest automotive components manufacturer and one of China’s largest non-government-owned companies.
A123 systems received US$249 million in grant from the Department of Energy for building battery production facility. As of June 2012, $129M of the grant has been used to build the 550 MWh Livonia plant and the Romulus plant. Remaining untapped $120M grant's expiry date has been extended from end of 2012 to end of 2014
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