Wanx­i­ang makes bid for US car com­pany

China Daily (Canada) - - BUSINESS - By HE WEI in Shang­hai hewei@chi­nadaily.com.cn

China’s largest auto parts man­u­fac­turer, Wanx­i­ang Group Corp, has made a last-minute bid for a United States-based al­ter­na­tive-fuel car pro­ducer. The move fol­lows the Chi­nese com­pany’s ear­lier ac­qui­si­tion of US bat­tery pro­ducer A123 Sys­tems Inc, a reg­u­lar sup­plier of Fisker Au­to­mo­tive Inc, for which Wanx­i­ang Amer­ica Corp is con­sid­er­ing a bid in a pro­posed auc­tion.

Fisker cred­i­tors asked the US Bank­ruptcy Court in Wilm­ing­ton, Delaware, to scrap Fisker’s agreed sale with a com­pany af­fil­i­ated with Hong Kong ty­coon Richard Li and in­stead hold an open auc­tion at which Wanx­i­ang’s US arm plans to bid, ac­cord­ing to Reuters.

Wanx­i­ang planned to make an ini­tial bid of $24.7 mil­lion and pledged to as­sume some li­a­bil­i­ties of Fisker, ac­cord­ing to court doc­u­ments filed be­fore the Mon­day dead­line to ob­ject to Fisker’s plan.

A hear­ing is sched­uled for Fri­day in the US to con­sider whether Fisker should adopt cred­i­tor pro­pos­als or pro­ceed with the sale to the af­fil­i­ate of Li, ac­cord­ing to Reuters.

A spokesman at Wanx­i­ang’s China head­quar­ters didn’t im­me­di­ately re­spond to a re­quest for com­ment from China Daily on Thurs­day.

A year af­ter sus­pend­ing pro­duc­tion, Fisker, the dor­mant maker of the plug-in sports car Karma, filed for bank­ruptcy in Novem­ber, while it ob­tained $168 mil­lion in loans from the US Depart­ment of En­ergy in de­vel­op­ing new- en­ergy tech­nolo­gies.

The in­vest­ment group led by Li pro­posed to pay an ini­tial $25 mil­lion for the debts in Oc­to­ber and buy out the rest of the com­pany us­ing “credit bid”, an abil­ity to con­trol their col­lat­eral that wiped out other cred­i­tors.

Wanx­i­ang was also among prospec­tive bid­ders in the Oc­to­ber auc­tion, but it was beaten out by Li’s team, which was re­ported to be al­ready “nail­ing down de­tails” with the US En­ergy Depart­ment, ac­cord­ing to Reuters.

In the lat­est pe­ti­tion, Wanx­i­ang plans to restart Fisker pro­duc­tion as early as April and even­tu­ally move man­u­fac­tur­ing from Fin­land to Michi­gan, ac­cord­ing to Wanx­i­ang’s pre­sen­ta­tion to the court.

The Chi­nese com­pany es­ti­mated it would sell more than 1,000 Karma hy­brids in the first 18 months in the US and 500 in Europe.

Wanx­i­ang said in its pre­sen­ta­tion it could lower pro­duc­tion costs, with­out elab­o­rat­ing. Fisker sold the Karma for more than $100,000 each.

“They (Wanx­i­ang) are ex­tremely ca­pa­ble and knowl­edge­able of the in­dus­try and know how to get things done,” Wil­liam Baldiga, a Brown Rud­nick at­tor­ney who rep­re­sents Fisker’s of­fi­cial cred­i­tors’ com­mit­tee, was quoted by Reuters as say­ing.

In China, the con­cept of elec­tric ve­hi­cles is be­ing ac­cepted and the tech­nolo­gies are mak­ing progress, said Michael Han­ley, global au­to­mo­tive leader of Ernst & Young.

“But key to the real take­off is to pro­vide man­u­fac­tur­ing scale and help bring down the cost,” said Han­ley.

The hy­brid model is, for now, the most promis­ing one, as it takes away the con­cern peo­ple may have about the op­er­at­ing range of al­ter­na­tive-en­ergy cars, bridg­ing the cars’ prac­ti­ca­bil­ity and en­vi­ron­men­tal pro­tec­tion, he noted.

In­ven­tors in China had filed more than 2,000 patent ap­pli­ca­tions for new-en­ergy cars as of the end of last year, one-fourth the num­ber in Ja­pan and half the num­ber in the US, ac­cord­ing to data from the United Na­tions World In­tel­lec­tual Prop­erty Or­ga­ni­za­tion.

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