A123 Auction Underway As Four Bidders Emerge While Fisker Waits
At least four companies have qualified to bid on the assets of now bankrupt US battery maker A123, one of which is the somewhat-controversial Wanxiang Group Corp of China, whom some US legislators want to block from the process.
Interestingly, NEC who has a near half ownership in AESC along with Nissan, and who is the manufacturer of the current battery found inside the Nissan LEAF has joined into bidding war. Rounding out the group is Johnson Controls Inc., and Siemens AG of Germany.
A123 had hoped to go into production of a disruptive new battery technology (EXT) in the first half of 2013 that saw a 90% pack retention rate over 2,000 cycles, and a 90% retention rate after 700 cycles at a blistering 167 degrees Fahrenheit.
Additionally, these EXT cells performed extremely well at 0F, a traditional Achilles heel of the lithium battery. Both of these exception hot and cold characteristics could give any potential buyer a leg up in getting to market first with the next best thing in battery tech.
Unfortunately for A123, a lack of demand coupled with a slow roll out of the Fisker Karma, as well as a costly recall on some defective Karma packs that were improperly welded caused A123 to bleed cash before it could get to market and generate a steady revenue stream.
It appears that A123’s proprietary value is truly being appreciated only after its demise.
The auction was scheduled to start Thursday morning at 10am in Chicago (at the law offices of Latham & Watkins), but reports surfaced that the parties were held up reviewing contracts and other details.
“It’s not like we’re bidding on gas stations,” said a person familiar with the auction.
With other smaller interests also said to be looking at acquiring some of A123’s lesser pieces, Bojan Guzina, an attorney representing Wanxiang said the auction could run into next week.
Meanwhile, Fisker has not been receiving batteries from A123 since the bankruptcy announcement and has been forced to idle its Karma production line in Finland for over a month already while they wait on the result.
Fisker CEO Tony Posawatz has said that the company is down to their last 100 packs which are being retained for service and repairs.
Even if the auction is tied up quickly, there is no guarantee their supply chain will be made whole, as A123 (and its bidders) are looking to rid themselves of the supply contract with Fisker by asking the bankruptcy judge to void the contract because it is “below market” value, and as such can be vacated under Chapter 11.
We suspect Fisker has already started to work on sourcing lithium battery packs from another supplier…just in case.