A123 granted court approval of sale procedures; auction set for Dec. 6

By Caroline Salls

Pittsburgh, Nov. 8 - A123 Systems, Inc. received court approval of the bid procedures for the proposed sale of its assets to Johnson Controls, Inc., according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Johnson Controls has offered to buy the automotive business assets, with a purchase price of $116 million.

Under the approved bid procedures, competing bids for the "purchased assets" and remaining assets must be submitted by 5 p.m. ET on Dec. 4.

Competing bids must exceed the stalking horse bid by at least $6 million. This amount includes a $2.5 million break-up fee and $3 million expense reimbursement to be paid to Johnson Controls if it is not the high bidder, as well as a $500,000 overbid amount.

The auction will be held on Dec. 6. Bids at auction must be made in minimum increments of $500,000; provided, however, that bids for the company's remaining assets must be made in minimum increments of $250,000.

The sale hearing is scheduled for Dec. 11.

As previously reported, Wanxiang America Corp. said in a hearing on Tuesday that it would like to be the stalking horse bidder and was prepared to make an offer for all of A123's assets, not just the automotive sector.

Based in Waltham, Mass., A123 designs, develops, manufactures and sells rechargeable lithium-ion batteries and battery systems. The company filed for bankruptcy on Oct. 16 under Chapter 11 case number 12-12859.

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