A123 Systems Receives Court Approval Of "First Day" Motions To Support Business
WALTHAM, Mass., Oct. 19, 2012 /PRNewswire/ -- A123 Systems, Inc. (Nasdaq: AONE) ("A123" or "the Company"), a developer and manufacturer of advanced Nanophosphate® lithium iron phosphate batteries and systems, today announced that yesterday the United States Bankruptcy Court for the District of Delaware (the "Court") granted the Company's request for certain "first day" orders that help support its business.
The Court granted A123 interim approval to use $15.5 million of its $72.5 million Debtor-in Possession ("DIP") financing from Johnson Controls, Inc. (NYSE: JCI) ("Johnson Controls") to support the Company's operations throughout the transaction process. A court hearing for final approval of the DIP has been scheduled for October 30, 2012. The Company also received approval to, among other things, continue paying employee wages, salaries, benefits and other employee obligations.
As previously announced, A123 entered an asset purchase agreement with Johnson Controls, in which Johnson Controls expects to acquire A123's automotive business assets. A123 also continues to engage in active discussions regarding strategic alternatives for its grid, commercial, government and other operations, and has received several indications of interest for these businesses. To facilitate the transaction process, A123 and all of its U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. The Company's subsidiaries located outside the U.S. were not included in the filings.
Additional information, including the terms of the Company's updated DIP agreement with Johnson Controls, which is expected to be filed shortly, is available on A123's website at www.a123systems.com or by calling A123's Restructuring Hotline, toll-free in the U.S., at 1-800-224-7654. For calls originating outside the U.S., please dial +1 973-509-3190. Court documents and additional information can be found at a dedicated website administrated by the Company's Claims Agent, Logan & Company: www.loganandco.com.Latham & Watkins LLP and Richards, Layton & Finger are serving as legal advisors, Lazard is serving as financial advisor, and Alvarez & Marsal is serving as restructuring advisor to A123.
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