Ener1 Inc, which received a $118.5 million federal grant to make lithium-ion batteries for plug-in electric cars, filed for bankruptcy protection amid heavy competition and after the demise of a large customer.
Ener1 Inc. said it had reached a deal on a restructuring plan that will significantly reduce its debt and provide up to $81 million to recapitalize the company.
The company listed assets of $73.9 million and debt of $90.5 million as of Dec. 31 in Chapter 11 papers filed in U.S. Bankruptcy Court in Manhattan and hopes to exit within 45 days.
Ener1 has been affected by competing battery developers in China and South Korea, “which generally have a lower cost manufacturing base” and lower labor and raw material costs, interim Chief Executive Officer Alex Sorokin said in the petition.
In January 2011, Vice President Joe Biden toured Ener1 in Greenfield, Ind. The company’s wholly owned EnerDel subsidiary won a $118 million Energy Department grant in August 2009 to produce electric batteries for Think models and a Volvo electric vehicle.
To date, the company has spent $55 million of the $118.5 million grant.
The company has received support from Republicans as well. The Bush administration awarded Ener1 $10 million in grants, and Indiana Gov. Mitch Daniels awarded EnerDel $7.1 million in tax credits. Energy officials say the project is moving forward on schedule and on budget, and is being closely monitored by the Energy Department.
Ener1 was hurt when a major customer, Think Global, filed for bankruptcy in June 2011, and for which it was exclusively providing commercial lithium-ion battery packs.[source: Ener1]