Developer and manufacturer of advanced batteries A123Systems took another step towards its financial recovery.
A123 Systems announced yesterday that it has signed a non-binding memorandum of understanding (MOU) with Wanxiang Group Corporation establishing the framework for a strategic investment through which Wanxiang would invest up to $450 million in A123.
Wanxiang is considered China’s largest automotive components manufacturer and one of China’s largest non-government-owned companies.
Wanxiang’s proposed investment in A123 is intended to create the capital structure necessary for the company to continue growing its core businesses, and alignment with Wanxiang is also expected to substantially strengthen A123’s access to the growing vehicle electrification and grid-scale energy storage markets in China.
Wanxiang Group Corporation and its related companies have more than $13 billion in revenue and more than 45,000 employees across its global businesses in equipment and automotive parts manufacturing, clean energy, financial services, agricultural products, natural resources and real estate, among others. Through its subsidiaries, including Wanxiang America Corporation, it has more than 3,000 U.S.-based employees.
A123 and Wanxiang are currently negotiating definitive documentation and intend to close the full transaction by the end of 2012.
A123 cannot provide any assurance, however, that definitive documentation will be executed, or, if it is executed, that the conditions to funding the full investment will be fulfilled.