Chinese automotive components manufacturer Wanxiang is planning to invest $450m in A123 Systems under a non-binding memorandum of understanding (MOU).
The investement is expected to create the capital structure necessary for the company to continue growing its core businesses as well as its vehicle electrification and grid-scale energy storage markets in China.
Under thedeal, Wanxiang is expected to provide A123 about $75m in debt financing and buy $200m of senior secured convertible notes as well as invest $175m by exercising warrants.
For the second quarter of 2012, A123 posted a loss of $82.9m while revenue fell 53% to $17m.
A123 CEO David Vieau said, "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."