A judge approved a deal Tuesday for a Chinese company to buy the assets of a bankrupt U.S. battery maker that won a quarter-billion-dollar grant from the federal government just three years ago.
Though the purchase still requires federal approval, the sale of A123 Systems Inc. to China-based Wanxiang Group Corp. moved closer to reality after a judge signed off on the nearly $257 million sale.
The Chinese company would receive most of A123's assets, but the failed company's government contracting business would go to U.S.-based Navitas Systems under a separate agreement that also won approval Tuesday.
"We believe the acquisition by Wanxiang will provide A123 with the financial support necessary to strengthen our competitive position ... and we look forward to completing the sale," A123's chief executive Dave Vieau said in a statement after a hearing in U.S. Bankruptcy Court in Delaware.
Still, the sale requires approval from the Committee on Foreign Investment in the United States, a federal entity that signs off on sales of U.S. companies to foreign buyers.
But several members of Congress have raised concerns about the deal.
Republican Sens. Chuck Grassley of Iowa and John Thune of South Dakota issued a joint statement Monday calling for a "full review" of the bankruptcy transaction by the Treasury Department, which also must approve the deal.
"In the end, the taxpayers will be left having to repay interest to China for a business that a Chinese company now owns," the lawmakers said.
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