A123 Systems: 'No assurance' it can continue to operate

[arkmundi]

I invested in Evergreen Solar early on. As it was going through bankruptcy, I attended a share-holder meeting to find out what I could. I asked "why did you get financial backing from Lehman Brother's" hedge fund? Given the risks of doing so. Given that so called "investment banks" existed for providing safe liquidity to promising start up companies. Remember it was Lehman's failure that was the second domino in the 2007 financial crisis. After Lehman fail, Barclays picked up all of Evergreens' stock securing the borrowing & lines of credit. They then proceeded to dilute till the stock became pennies and then worthless.

So then Evergreen CEO Richard Feldt took the question and answered it "because that's where the money is!" When trying to finance new companies, the executive team has to find money somewhere and when they strike gold, they borrow heavily, with immediate cash infusions and lines of credit, all tied in some manner back to the Company's primary asset - stock.

So China and Chineese companies like the Wanxiang group is where the money is. They are heavily invested in American companies, with A123 being their latest acquisition. So there we have it, the close of a chapter on a great American startup. I be trying to read the next chapter as its written, because its high drama. I'm waiting for the movie.

 

[Jason27]

I'm glad to see Chinese solar panels slapped with tariffs. It took years to make this happen after the US solar industry got flooded with cheap Chinese panels. Where was the "WTO" when these illegal trade practices were going on? The WTO handcuffs US industries but is scared to death of the Chinese government.

 

[Chalo]

With both lithium iron nano-phosphate batteries and photovoltaic cells, American firms had plenty of opportunity to do right. If they had been trying to maximize the generalized benefits of the new technology instead of trying to develop imaginary markets first, then we might all now be enjoying the fruits of their work, and they'd be making handsome profits. But between the relentless short-term greed of the rentier class and the relentless incompetence of the American management class, these American industries couldn't even get out of their own way.

Now it falls to the Chinese to use what limited competence they have to try to serve the market that actually exists, rather than the market they would like to design for themselves like the American firms wanted to do.

If the early adopters and sure-thing buyers for your product want small inexpensive household and portable PV solutions, or 1 kWh sized batteries for their own purposes, you sell them that. You don't tell them "no" because you're too busy focusing on an unproven, backwards-looking prospective market of stupid lazy people in electric cars, or philosophically retarded public utilities, or self-extincting big-box stores. You put your goods in the hands of individuals who understand the potential, and those people will show you what your technology is good for.

The decision makers in charge of the poor decisions for American technology wanted to jump straight to the Henry Ford or Steve Jobs part of the business arc, and pretended they could skip the decades that preceded those dudes and made their success possible.

 

[The Stig]

http://www.bloomberg.com/news/2013-...roval-to-buy-bankrupt-battery-maker-a123.html

 

[liveforphysics]

With both lithium iron nano-phosphate batteries and photovoltaic cells, American firms had plenty of opportunity to do right. If they had been trying to maximize the generalized benefits of the new technology instead of trying to develop imaginary markets first, then we might all now be enjoying the fruits of their work, and they'd be making handsome profits. But between the relentless short-term greed of the rentier class and the relentless incompetence of the American management class, these American industries couldn't even get out of their own way.

Now it falls to the Chinese to use what limited competence they have to try to serve the market that actually exists, rather than the market they would like to design for themselves like the American firms wanted to do.

If the early adopters and sure-thing buyers for your product want small inexpensive household and portable PV solutions, or 1 kWh sized batteries for their own purposes, you sell them that. You don't tell them "no" because you're too busy focusing on an unproven, backwards-looking prospective market of stupid lazy people in electric cars, or philosophically retarded public utilities, or self-extincting big-box stores. You put your goods in the hands of individuals who understand the potential, and those people will show you what your technology is good for.

The decision makers in charge of the poor decisions for American technology wanted to jump straight to the Henry Ford or Steve Jobs part of the business arc, and pretended they could skip the decades that preceded those dudes and made their success possible.

Nail struck on the head solidly my friend.

I pity Wanxiang. Seems like a large amount of money to spend for the previous decade's exciting chemistry tech/development that dead-ended 5 years ago.

 

[flathill]

the thing is china already made a super huge investment in phosphate
their plants are at 10-15 percent capacity for 5 plus years now
thundersky calb russian etc
if they can upgrade them all to a123 tech with no patent lawsuits
the investment starts to make more sense

 

[e-beach]

I pity Wanxiang. Seems like a large amount of money to spend for the previous decade's exciting chemistry tech/development that dead-ended 5 years ago.

Maybe for cutting edge ev tech. But remember, the Chinese people are culturally very pragmatic. If Wanxiang can sell A123ish battery tech to the world for the next 20 years, in all sorts of battery applications, then their money investment will be cents on the dollar. IMHO it is probably time to look closely at investing in Wanxiang.

 

[e-beach]

http://www.detroitnews.com/article/...irm-A123-discloses-note-holder-recovery-rates


February 8, 2013 at 3:26 pm
Bankruptcy plan of battery firm A123 discloses note-holder recovery rates

By Bill Rochelle
Bloomberg News
Comments

A123 Systems Inc., a developer of automotive lithium-ion batteries before the business was sold, filed a liquidating Chapter 11 plan giving holders of $143.8 million in subordinated notes and $124 million of general unsecured claims a recovery of about 65 percent.

Holders of $35.7 million in senior note claims will be paid in full, according to the disclosure statement accompanying the plan.

Investors are predicting that holders of subordinated notes will recover more than the disclosure statement predicts. Trace, the bond-price reporting system of the Financial Industry Regulatory Authority, reports that the convertible subordinated notes traded Thursday for 73 cents on the dollar, compared with 65 cents in the disclosure statement.

The notes have more than tripled in price, having sold as low as 21.25 cents on the day of bankruptcy in October.

Explaining the discrepancy between the bond price and the disclosure statement, David Epstein, a managing director with CRT Capital Group LLC in Stamford, Connecticut, said that "the market is saying that the general unsecured claims are inflated on a net basis."

The disclosure statement, filed together with the plan on Feb. 6, says it's unlikely there will be any distribution for shareholders. A March 13 hearing is scheduled for approval of the disclosure statement.

Although unsecured, senior notes will be paid in full as a consequence of enforcement of provisions in the subordinated notes, under which distributions to the junior creditors go to senior noteholders until they are paid in full.

Most of the business was sold at the end of January for $256.6 million to China's Wanxiang Group Corp.

With U.S. plants in Michigan and Massachusetts, A123 listed assets of $459.8 million and liabilities totaling $376 million in the petition for Chapter 11 reorganization. Debt includes $143.8 million on 3.75 percent convertible subordinated notes and $22.5 million owing to Wanxiang on a pre-bankruptcy loan.

A123 has 625 employees at Romulus and Livonia plants and an Ann Arbor office, along with 348 temporary workers in the state.The company initially said that other liabilities included about $33 million owing to trade suppliers. Revenue was $159.2 million in 2011. Net losses were $257.8 million in 2011 and $269 million in 2012 through August.

 

[USAEBIKECO]

A123 still makes batteries for tesla which is HUGE. Tesla is a company on the rise especially with the Model S. Just that alone is a boon for A123.

 

[arkmundi]

A123 still makes batteries for tesla which is HUGE. Tesla is a company on the rise especially with the Model S. Just that alone is a boon for A123.

Don't believe that to be the case: http://www.teslamotors.com/about/pr...tesla-motors-supply-automotivegrade-battery-c

 

[Hillhater]

A123 still makes batteries for tesla which is HUGE..

They dont supply Tesla..
..and Tesla is not "Huge" .

 

[liveforphysics]

A123 still makes batteries for tesla which is HUGE. Tesla is a company on the rise especially with the Model S. Just that alone is a boon for A123.

To the best of my knowledge, the singular production vehicle reaching a quantity in the hundreds of units to be sold using A123 cells for power is the Fiskar Karma. The internal failures from MFG defects in the cells caused a recall of all packs, nearly destroying both Fiskar and A123, but Fiskar may yet recover IF they can find another cell provider before they run out of cash.

The number of OEM's that talked about using A123 cells for various EVs is huge. Like super huge, like most everyone of them, yet 95% of those just vanish cause they were nothing more than ploys to get loans/capital, and the other 5% that actually went through battery testing to make EV's ended up choosing other cells after testing A123's offerings (with the exception of Fiskar).

Edit**
(I know the Shanghi EV company did make some tiny EVs using A123 cells for a short period, it's possible they also produced quantity in the hundreds, but they were more like golf-carts.)

 

[grindz145]

For long-term stationary power, nano-phosphate still makes sense, but the sodium stuff will probably leapfrog it soon.

 

[liveforphysics]

For long-term stationary power, nano-phosphate still makes sense, but the sodium stuff will probably leapfrog it soon.

I think all lithium based stuff is too pricey for grid storage.

I want molten salt batteries in giant tanks of like 2MWh per cell, not 2MWh per huge trailer packed with 10s of thousands of tiny cells with intricate bussing and BMS systems etc.

I want giant tubs like water-towers with super-insulation covering them, filled with a molten salt density separated slurries composing the layers to make up the layers in cells. I just watched a cool TED talk on it, very cool idea. I wouldn't want to be the guy trying to control the corrosion in that cell, but I would love to see them work out.

 

[flathill]

The salt doesnt need to be molten

WARM SODIUM BATTERY


There is some amazing news in the world of high energy batteries. Coors Ceramics thinks they have a way to make Sodium-Sulfur batteries that can operate at 90° C ( 194° F which is below the boiling point of water)and charge-discharge once a day for ten years.

The battery breakthrough comes from a Salt Lake company called Ceramatec, the R&D arm of CoorsTek, a world leader in advanced materials and electrochemical devices. It promises to reduce dependence on the dinosaur by hooking up with the latest generation of personalized power plants that draw from the sun.
Solar energy has been around, of course, but it's been prohibitively expensive. Now the cost is tumbling, driven by new thin-film chemistry and manufacturing techniques. Leaders in the field include companies like Arizona-based First Solar, which can paint solar cells onto glass; and Konarka, an upstart that purchased a defunct Polaroid film factory in New Bedford, Mass., and now plans to print cells onto rolls of flexible plastic.

The convergence of these two key technologies -- solar power and deep-storage batteries -- has profound implications for oil-strapped America.

"These batteries switch the whole dialogue to renewables," said Daniel Nocera, a noted chemist and professor of energy at the Massachusetts Institute of Technology who sits on Ceramatec's science advisory board. "They will turn us away from dumb technology, circa 1900 -- a 110-year-old approach -- and turn us forward."



Note it is the same beer coors
One brother wants to make three thousand dollar refrigerator size batts for every house in the usa
The other is a major political operative and killed it

Remember the power comes from control
The control lever is energy

"Permit me to issue and control the Energy of the nation and I care not who makes its laws"
-flathill

 

[flathill]

"It's a miracle material," corrects Grover Coors. He's the great-grandson of Adolph Coors, the brewmaster-industrialist who started all this. Grover has a Ph.D and specializes in solid-state ionics and advanced materials. He's working with Ceramatec as a sort of research fellow to evaluate technologies and advise senior management. A.J. stayed on as president after the sale to CoorsTek.

Grover's brother, John K. Coors, is CEO of CoorsTek, the manufacturing company that applies what the scientists at Ceramatec dream up. Their nephew, Doug Coors, oversees R&D

"To most Americans, the word 'Coors' means beer," wrote Business Wire on the ceramic maker's 75th birthday. "But to scientists and industrialists throughout the world, the word 'Coors' means technical ceramics of extraordinary quality."


Nobody at CoorsTek even blinks at such figures. The company already produces 3 million pounds of ceramic material per month. "Once we have a working prototype battery with all the standards and cost requirements met, it will come up quickly," said Grover Coors. "It would scare people to know how quickly we can bring this up."

 

[flathill]

Ford and coors pioneered the sodium sulfur battery in the 60s
The worked overtime during the 70s oil crisis and had a break
warm sodium batts
The tech is waiting in the wings

 

[Icewrench]

B456 Systems Inc., the bankrupt electric-car battery maker formerly called A123

 

[USAEBIKECO]

Profits are hard to come by in the EV industry. You have to have low overhead and a solid business plan.