A123 Systems (AONE) May Appeal Bankruptcy Judge to Auction Lithium-Ion Battery Unit (JCI)

A123 Systems, Inc. (Nasdaq: AONE) is indicated higher Friday following reports that it is seeking a better offer for its automotive lithium-ion battery business.

According to Bloomberg, A123 is hoping to convince a U.S. bankruptcy court judge to hold an October 30th hearing for approval of auction and sale procedures related to the unit. Johnson Controls (NYSE: JCI), which was selected to provide about $72.5 million of debtor-in-possession financing, is already under commitment to buy the unit for $125 million in cash plus costs associated with curing defaults on contracts. Approval on the Johnson Controls contract is required no later than October 31st.

However, A123 wants the judge to approve a measure for bidding on the unit to be due November 16th, an auction on November 19th, and sale approval on November 26th.

The following are financial metrics and obligations listed by A123 in the filing:

• Assets of $459.8 million;
  
  
• Liabilities totaling $376 million;
  
  
• Debt includes $143.8 million on 3.75 percent convertible subordinated notes;
  
  
• Other liabilities include $22.5 million on a bridge loan owing to Chinese auto-parts maker Wanxiang Group Corp. That company held talks on acquiring A123 before bankruptcy.
  
  
• A123 owes about $33 million is owing to trade suppliers, according to a court filing.
  
  
• FY11 revs were $159.2 million;
  
  
• YTD FY12 revs are at $39.6 million
  
  
• FY11 net loss was $257.8 million;
  
  
• FY12 net loss to August is at $269 million.

Bloomberg also noted that "the convertible subordinated notes traded yesterday for 37.125 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The notes traded as low as 21.25 cents on the day of the bankruptcy filing."

A123 reported receiving court approval of certain "first day" orders that help support its business.

Shares of A123 are about 45 percent higher Friday morning.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Exxon Said To Study Takeover Targets Including Woodside Energy - Bloomberg
• DoJ approves Paramount's acquisition of Warner Bros - Politico
• M3-Brigade cancels shareholder meeting after terminating ReserveOne deal