A123 gets court OK for extension of $15.5 million interim DIP loan

By Jim Witters

Wilmington, Del., Oct. 31 - A123 Systems, Inc. received approval for an extension of its $15.5 million interim debtor-in-possession financing facility as its attempts to change lenders before the final DIP hearing, according to documents filed Oct. 31 with the U.S. Bankruptcy Court for the District of Delaware.

The court extended the interim DIP order through Nov. 5.

The company's interim DIP lender is Johnson Controls, Inc.

A123 requested the extension to allow the court to consider a proposed replacement DIP facility through Wanxiang America Corp., the debtors' prepetition lender.

A123 hopes to draw the full $50 million replacement DIP loan upon interim court approval, the company said.

Wanxiang, a China-based automotive parts manufacturer, also said at an Oct. 18 hearing that it hopes to become the stalking horse bidder for A123's assets. Johnson Controls has offered to buy the automotive business assets, with a purchase price of $116 million.

A123 is a Waltham, Mass.-based company that designs, develops, manufactures and sells rechargeable lithium-ion batteries and battery systems. The company filed for bankruptcy on Oct. 16. Its Chapter 11 case number is 12-12859.

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