by Christopher Freeburn | October 16, 2012 12:00 pm
A manufacturer of batteries for electric cars that received $249 million in federal grants filed for Chapter 11 bankruptcy protection on Tuesday.
A123 Systems (NASDAQ:AONE), which never posted a profit, had used about $129 million of the grants so far. It is now in talks to sell its assets. Johnson Controls has agreed to acquire its automobile-related business, including a stake in a Chinese battery manufacturer, for $125 million, the Associated Press noted.
A123 posed an $83 million loss during the second quarter. Its shares, which debuted in 2009 at $20 a share, fell from 24 cents at Monday’s close to just 6 cents in Tuesday trading.
In August, the company said it had agreed to a $450 million deal with Wanxiang Group, a Chinese auto component producer. However, that deal has been terminated, according to A123 officials.
The failure of A123 Systems will almost certainly raise more questions about the Obama Administration’s funding of green-energy projects. It joins a number of other failed federally-backed ventures, including solar power producer Solyndra, which collapsed after receiving $528 billion in government grants.
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