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A123 Systems (AONE) Enters MEGA Tax Credit Agreement with Michigan Economic Growth Authority

November 25, 2009 11:02 AM EST
AONE Hot Sheet
Overall Analyst Rating:
    NEUTRAL (= Flat)

EPS Growth %: -70.6%
In a Form 8-K, A123 Systems (Nasdaq: AONE) announced that on November 20, 2009, the company entered into a MEGA Tax Credit Agreement with the Michigan Economic Growth Authority.

The Agreement provides for a tax credit equal to 50% of the Company’s capital investment expenses related to the construction of integrated battery cell manufacturing plants in the state of Michigan. The maximum tax credit is $100 million over a four-year period. The maximum tax credit in any one tax year is $25 million.

The Company must create 300 jobs no later than December 31, 2016 in order to receive the tax credit. The tax credit is subject to a re-payment provision in the event the Company relocates 51% of the 300 jobs outside of the State of Michigan within 3 years after the last year the Company received the tax credit.

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