The bankrupt manufacturer of the unique lithium-ion batteries that power Anaheim-based Fisker Automotive’s flagship Karma will be purchased in a bankruptcy-backed auction by the U.S. branch of Chinese auto parts manufacturer Wanxiang Group Corp.
A123 Systems Inc., based in Massachusetts, will sell most of its assets, including its automotive unit, to the China-based firm for $256.6 million. Wanxiang Group submitted the winning bid in an auction overseen by the U.S. Bankruptcy Court for the District of Delaware. In a separate deal, A123’s government and military contracts are being purchased by Illinois-based Navitas Systems, an energy storage systems manufacturer, for $2.25 million.
The deal is significant to Fisker because A123 Systems was the exclusive manufacturer of the automotive lithium-ion battery that powers Fisker’s flagship vehicle, the 2011 Karma. After declaring bankruptcy in October, A123 slowed its production and asked a judge to void all of its current and outstanding contracts.
Fisker, A123’s largest client, at first moved to delay the bankruptcy auction and argued that its contract should not be broken. However, two weeks ago, the luxury green automaker announced that it would put production of the Karma on hold, due to limited supply of its A123-manufactured batteries, and await the outcome of the bankruptcy auction.
Roger Ormisher, a spokesman for Fisker, said that the company is very pleased at the outcome, and explained that Wanxiang America is backed by a huge multinational conglomerate.
“We’re obviously very pleased that the case has been resolved so quickly. The next step is to renegotiate contracts with the new supplier,” Ormisher said. “We’re very impressed with the company’s [Wanxiang’s] commitment to vehicle electrification technology.”
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