A123 Systems looks to extend DIP loan maturity to allow sale closing

By Caroline Salls

Pittsburgh, Dec. 13 - A123 Systems, Inc. requested court approval to extend the maturity date of its debtor-in-possession loan agreement with initial lender Wanxiang America Corp. to March 31 from Dec. 31, according to a Dec. 12 filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Wanxiang was also the successful bidder for substantially all of A123's assets.

Although the sale is expected to close on Jan. 15, the company said the closing could occur at any time before March 31 under the purchase agreement, depending on when the closing conditions are satisfied.

In any event, A123 and Wanxiang do not expect to close the sale before the Dec. 31 DIP loan maturity date.

As a result, the company said Wanxiang has agreed to amend the loan agreement without requiring payment of an extension fee to prevent the expiration of the DIP loan before the sale closes.

A hearing is scheduled for Dec. 27.

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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