Agrees to change in debtor-in-possession funding to help maintain value of A123 assets
In collaboration with A123,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. 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," said Alex Molinaroli, president, Johnson Controls Power Solutions. "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."
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 Nov. 5, 2012. 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," said Molinaroli. "We remain committed to serving the dynamic global advanced battery market and continuing to build jobs in the United States."