Lithium-ion battery and systems maker, A123 Systems, said it will sell off its automotive business assets to Johnson Controls, simultaneously filing for Chapter 11 bankruptcy protection in a deal valued at $125 million.
The agreement comes just two months after A123 struck a deal with China-based auto parts maker, Wanxiang Group, that involved debt and warrants worth up to $450 million.
That deal faced political opposition, as at least one elected official publicly criticized the possibility of a foreign company controlling a U.S. technology company that had received taxpayer support.
The exact status of the Wanxiang deal was not clear. On Monday, A123 announced it had missed a debt payment to Wanxiang, but A123 chief executive, David Vieau, now says the deal will not go forward.
Now that it has nixed the agreement with Wanxiang, and in order to sell off its assets in a controlled environment, A123 and its U.S. subsidiaries have filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware.
Included in the Johnson Controls purchase are A123 facilities in Livonia and Romulus, Michigan and China, its interest in Shanghai Advanced Transaction Battery Systems Co., and all of the company’s auto technology, products and contracts.
As part of the proposed deal, Johnson Controls has committed $72.5 million in debt financing to continue A123’s operations during the pending sale.