Two Republican senators and a congressman questioned the purchase of a Chinese company of the bankrupt battery manufacturer A123 System. Wanxiang Group Corp. won the auction conducted under the supervision of the US Bankruptcy Court for the District of Delaware. The Chinese company will buy some of A123?s assets for $256.6 million.
A123?s government business was bought by Navitas Systems. US Representative Bill Huizenga said that Wanxiang?s acquisition of A123 raised some concerns even if the defense operations were sold to another entity.
Johnson Controls was expected to buy A123?s automotive unit but Wanxiang interceded and provided bankruptcy financing. The Republicans were concerned about the $249 million grant that the US Department of Energy gave to A123 in order to increase its manufacturing capacity. Now the Chinese company owns the capacity.
Senators Chuck Grassley of Iowa and John Thune of South Dakota repeated their concerns they have raised before. Thune called President Barack Obama?s energy policy a win-win for China and lose-lose situation for the taxpayers.
Of the $249 million grant, $133 million was already forwarded to A123. The remaining balance would not be given to Wanxiang, even if it manages to clear the final obstacles in acquiring the batter company. The money was used on facilities and equipment to be used in the United States and the government expects those assets to remain in Michigan and anywhere else in the country.
According to Energy Department spokesman Bill Gibbons, the department worked through the bankruptcy process to make sure that the equipment and plants that were partially paid for by the Recovery Act would stay in Michigan and give American workers more job opportunities.
It has been reported that a court hearing to grant approval for the sale is set for Tuesday. The Committee for Foreign Investment in the US will also review the Wanxiang deal.
Source: http://www.paydayloansmag.com/republican-lawmakers-question-wanxiang-group-purchase-of-a123-systems/
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