What Happened to A123's Chinese Rescue? has some more details in an updated story:
“We determined not to move forward with the previously announced Wanxiang agreement as a result of unanticipated and significant challenges to its completion,” said David Vieau, A123′s chief execuitve, in today’s statement (PDF).
Whatever could that mean? The company did not elaborate. But in yesterday’s SEC filing announcing it would default on some of its debt, the company mentioned this (emphasis ours: )
On October 12, 2012, the Issuer entered into a Consent Agreement with Wanxiang America (the “Consent Agreement”), pursuant to which the deadline for delivering evidence of the governmental consents and approvals listed on Schedule 3.03 of the Loan Agreement was extended from October 16, 2012 to October 23, 2012.
So last Friday, facing a deadline of today to secure the government approvals needed for the deal, the parties agreed to extend for a another week. Today, they announce the deal is off. . . .
A123 had listed clearance by the Committee on Foreign Investment in the U.S. as a condition of going forward with the Wanxiang deal. The CFIUS, made up of representatives from nine different federal agencies, reviews transactions involving foreign corporations that could effect national security. A123 had military contracts, including a program to develop an advanced battery for military use.
Worth mentioning here: the Wanxiang deal attracted significant hostility from leading congressmen at the time of its announcement. Florida Republican Cliff Stearns, who chairs the House Energy and Commerce Committee’s panel on oversight and investigations, said the deal showed the government has “failed to secure sensitive taxpayer funded intellectual property from being transferred to a foreign adversary.”
On October 9, Republican senators Chuck Grassley, the ranking member of the senate judiciary committee, and John Thune, wrote a letter to A123′s CEO (PDF) regarding the Wanxing deal.
“Our concern is that billions of U.S. taxpayer dollars have already flowed to foreign companies through the Recovery Act, and this recent announcement could lead not only to more taxpayer dollars going overseas, but as you noted, it could also lead to foreign government access to technology A123 has described as “innovative” and “next generation,” the letter said.
It goes on to ask 14 questions of Mr Vieau regarding the deal, focussed on the company’s access to government grants and its processes for ensuring sensitive information — it already has defense contracts, and is pursuing more — is not leaked to its prospective Chinese owners. And it set a deadline of October 23 to get an answer.
The Wanxiang deal may be scuttled, but Republicans are not finished with A123. A spokeswoman for GOP presidential candidate Mitt Romney issued a statement this afternoon calling A123′s bankruptcy “yet another failure for the President’s disastrous strategy of gambling away billions of taxpayer dollars on a strategy of government-led growth that simply does not work. ”"
And here's more in A123 Gives Romney More Debate Ammunition:
Mitt Romney just got more fodder to attack Barack Obama’s green energy programs ahead of Tuesday night’s presidential debate.
A123 Systems Inc. . . ., a maker of electric vehicle batteries, received accolades from the president in September 2010. “This is important not just because of what you guys are doing at your plant, but all across America,” Mr. Obama said in a phone call timed to the opening of a battery manufacturing facility. “Because this is about the birth of an entire new industry in America — an industry that’s going to be central to the next generation of cars.”
Energy Secretary Steven Chu in 2009 said the company was “one of the success stories of a high-technology company that was funded with government funds” and “the model of what we want to happen in the future on a bigger scale.”
The Romney campaign has attacked Mr. Obama for what it says is ill-advised government spending on risky clean-energy start-ups. In last week’s vice presidential debate, Paul Ryan called the stimulus program “green pork.” . . .
A123 was using the federal grant to build a factory in Michigan, a state Mr. Romney would like to win next month. Mr. Obama has been hammering Mr. Romney over his opposition to government support for U.S. auto makers during the recession.
In a statement, Romney campaign spokeswoman Andrea Saul said: “A123’s bankruptcy is yet another failure for the President’s disastrous strategy of gambling away billions of taxpayer dollars on a strategy of government-led growth that simply does not work.”"
This A123 situation may well provide some excitement at tonight's presidential debate.
In any event, when taken as a whole, it sure is intriguing stuff.
Enjoy the fireworks.