A123 Systems, a Waltham company that makes lithium batteries, said Wednesday that it has signed a non-binding memorandum of understanding with Wanxiang Group Corp. that establishes 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, A123 said.
A123 has been struggling from a recent recall of defective batteries, a cut in orders from one of its largest customers, and concerns it disclosed in financial filings earlier this year about its ability to raise enough cash to meet operating needs. In a separate press release, A123 reported a second-quarter net loss of $82.9 million on revenues of $17 million.
In a statement Wednesday, A123 chief executive David Vieau said, “Today’s announcement is the first step toward solidifying a strategic agreement that we believe would remove the uncertainty regarding A123’s financial situation. 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 US 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.”
A123 has scheduled an 8:00 a.m. conference call to discuss the announcement as well as the company’s financial results for the second quarter 2012.