Lithium ion battery maker A123 systems has finalised its agreement with Chinese automotive components manufacturer Wanxiang for the provision of $465m funds to continue its core businesses as well as its vehicle electrification and grid-scale energy storage markets in China.
According to the battery maker, the planned investment comprises an initial credit extension of $25m which is expected soon, while the remaining will be provided through convertible notes and bridge finance with warrants.
A123 CEO David Vieau said the company consider's the investment to be a strong validation of A123's technology and the company's ability to compete in high-growth markets.
"We believe that the significant commitment of capital from Wanxiang would help strengthen A123's financial position, and by leveraging Wanxiang's global capabilities, we expect to see increased demand for our products," Vieau said.
Following the completion of funding, Wanxiang would have rights to acquire 80% ownership in A123.
The finalisation of agreement follows non-binding memorandum of understanding signed by both the parties on 8 August 2012.
