Cash-strapped battery maker A123 Systems says it will raise about $39 million to help fund its ongoing operations. The Massachusetts-base company is working to restore cash flow following a costly battery recall.
A123 says it will raise about $9 million from the sale on 7.7 million shares, with the remainder of the $39 million balance coming from senior convertible notes. Both deals are expected to be completed by July 10, according to
Reuters.
A123 found itself in a financial hole earlier this year following a battery recall. The recall - which involved the battery pack for the
Fisker Karma - will cost the company $67 million and also
consume A123's production capacity for the next several quarters. As a result of the recall, A123 has braced investors for several quarters of steep losses.
Despite those financial woes, A123 recently announced it was
hiring 400 new employees across its three Michigan production facilities.
Aside from Fisker, A123's automotive customers include General Motors, BMW and Tata Motors.
