A123 Systems Announces Non-Binding Memorandum of Understanding With Wanxiang Group Corporation for Strategic Investment

A123 Systems

, a developer and manufacturer of advanced Nanophosphate® lithium iron phosphate batteries and systems, announced Wednesday 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 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. A123 will hold a conference call today at 8:00 a.m. ET to discuss this announcement as well as the company's financial results for the second quarter 2012. "Today's announcement is the first step toward solidifying a strategic agreement that we believe would remove the uncertainty regarding A123's financial situation," said David Vieau, CEO of A123. "A substantial capital investment from Wanxiang would not only provide financial stability to A123 as we continue to grow, but it would also align us with a large, successful global brand in the automotive and cleantech industries. Wanxiang has a successful track record of operating in the U.S. with significant employment and commitment to good corporate citizenship, and we expect that a strategic agreement with Wanxiang would help enhance our competitive position in the global marketplace, especially in China."