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China’s Wanxiang Saves American Battery Maker A123, Takes 80% Stake In Company

China’s Wanxiang Saves American Battery Maker A123, Takes 80% Stake In Company
4 days ago by Jay Cole 9

Upcoming Chevrolet Spark EV With A123 Pack And System On Board
Struggling US battery maker A123 has dramatically avoided the perils of bankruptcy by signing a non-binding MoU (memorandum of understanding ) with China’s Wanxiang Group Corp, the largest auto parts maker in that country (think Magna as a US-based comparison).

A123 Prismatic Battery Modules For PHEV & EV Applications
The deal will see Wanxiang take up 80% control of the company by year’s end in exchange for an investment of up to $450 million dollars.

This is good news if you are interested in the upcoming Chevrolet Spark EV, and were concerned about A123′s ability to deliver lithium packs for that car when it gois into production in 2013.

Fisker Automotive can also breath a sigh of relief that their battery maker for the Karma and upcoming Atlantic is not going anywhere.

For current shareholders, it is unclear how this dilution will affect the value of the stock. At time of press, A123 shares were trading up 6% (real time quote here).

A123 Systems , who received $249 million ATVML loan (for advancement of green technology) from the Obama administration in 2009, had found itself extremely short on cash and still facing the costs of a $60 million recall/warranty issue on lithium battery packs supplied earlier to the likes of Fisker Automotive and others.

With only $47.7 million as of 30 June 2012 in cash (and equivalents) reported for this past quarter ended, excluding a recent private investment deal, and stock offering worth another $36.8 million, the company’s odds of survival had been fading fast.

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