Wanxiang keen on bankrupt A123
Source: Bloomberg News |
October 18, 2012, Thursday
|
Print Edition
Print Edition
THE Chinese auto-parts maker that previously bailed out A123 Systems Inc, the US electric-car battery maker that filed for bankruptcy protection on Tuesday, said yesterday that it's still keen in taking over the firm.
The bankruptcy filing may turn A123 into a more attractive investment because the court proceedings would clear out legal risks, Ni Pin, president of Wanxiang Group Corp's US operations, said yesterday. The automotive business assets that A123 announced on Tuesday it would sell to Johnson Controls Inc are separate from what Wanxiang had targeted, Ni said.
"Bankruptcy court is like a filter that lets a dirty big boy covered with mud go through it and turn himself into a clean boy," Ni said. "Even though the boy may become smaller, he doesn't have the obligations he used to have."
A123, the recipient of a US$249 million federal grant, said it scrapped the previous agreement with Wanxiang as it filed for bankruptcy protection and agreed to sell its automotive business assets to Johnson Controls. The Chinese company, the nation's biggest auto-parts maker, earlier this year agreed to provide A123 with US$465 million in loans and bonds convertible into an 80 percent stake.
Wanxiang's deal was structured to protect itself against A123's potential bankruptcy, Ni said. Still, the court proceedings may result in Wanxiang facing competing suitors, which may raise the cost of A123, he said.
The Johnson Controls deal doesn't clash with Wanxiang because the Chinese company is interested in all of A123, not part of its assets, Ni said.
The earlier deal between the Chinese company and A123, announced in August, had drawn opposition from Massachusetts-based Representative Cliff Stearns, a Florida Republican, who cited possible national security concerns.
Ni said Wanxiang hasn't faced any US regulatory opposition and that the firm may have drawn attacks from politicians because the deal came during an election year.
"In a two-party system, they have to figure out an enemy and China is the easiest one to target," Ni said. "This is just the reality."
The bankruptcy filing may turn A123 into a more attractive investment because the court proceedings would clear out legal risks, Ni Pin, president of Wanxiang Group Corp's US operations, said yesterday. The automotive business assets that A123 announced on Tuesday it would sell to Johnson Controls Inc are separate from what Wanxiang had targeted, Ni said.
"Bankruptcy court is like a filter that lets a dirty big boy covered with mud go through it and turn himself into a clean boy," Ni said. "Even though the boy may become smaller, he doesn't have the obligations he used to have."
A123, the recipient of a US$249 million federal grant, said it scrapped the previous agreement with Wanxiang as it filed for bankruptcy protection and agreed to sell its automotive business assets to Johnson Controls. The Chinese company, the nation's biggest auto-parts maker, earlier this year agreed to provide A123 with US$465 million in loans and bonds convertible into an 80 percent stake.
Wanxiang's deal was structured to protect itself against A123's potential bankruptcy, Ni said. Still, the court proceedings may result in Wanxiang facing competing suitors, which may raise the cost of A123, he said.
The Johnson Controls deal doesn't clash with Wanxiang because the Chinese company is interested in all of A123, not part of its assets, Ni said.
The earlier deal between the Chinese company and A123, announced in August, had drawn opposition from Massachusetts-based Representative Cliff Stearns, a Florida Republican, who cited possible national security concerns.
Ni said Wanxiang hasn't faced any US regulatory opposition and that the firm may have drawn attacks from politicians because the deal came during an election year.
"In a two-party system, they have to figure out an enemy and China is the easiest one to target," Ni said. "This is just the reality."
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