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A123 Systems, Inc. (NASDAQ:AONE) to approach court for loan from Wanxiang

Electric car-battery maker A123 Systems, Inc.(NASDAQ:AONE), which is currently following bankruptcy proceedings, pans to approach the court seeking approval for a loan from China’s Wanxiang Group Corp.

Johnson Controls, which has made a bid to acquire the automotive assets of the company, said that it would withdraw its prior loan commitment to A123.

A123 had filed for bankruptcy a couple of weeks back and Johnson Controls had offered it an interim loan as part of the restructuring of the company.

But subsequently A123 filed papers in court on Friday and said that it had reached an agreement with Wanxiang Group for a replacement loan.

In a statement released late on Friday, Johnson Controls said it is withdrawing the debtor-in-possession (DIP) loan to avoid delays to the bankruptcy process.

“Johnson Controls has chosen not to be the debtor-in-possession lender during A123’s bankruptcy process to avoid potential delays,” Johnson Controls said in the statement.

Both Johnson Controls and Wanxiang are fighting for control over the bankrupt auto parts firm.
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