Ener1 — a lithium-ion battery-maker whose EnerDel subsidiary received a $118.5 million grant from DOE as part of the 2009 stimulus — has filed for Chapter 11 protection, the company announced Thursday.
Ener1 owns 80.5 percent of EnerDel, while 19.5 percent is owned by the auto parts manufacturer Delphi, according a company press release last week.
The news comes just as President Barack Obama tours the country touting his energy plan. It’s also exactly a year since Vice President Joe Biden visited the company to highlight Obama’s 2011 State of the Union promise to put 1 million electric vehicles on the road by 2015, a plan that has largely fallen by the wayside.
Ener1’s filing, in U.S. Bankruptcy Court for the Southern District of New York, is part of a “pre-packaged” plan that will restructure the company and bring in as much as $81 million in new capital.
The plan is designed to keep the Ener1’s operations going and not lose any jobs, according to the company.
But House Republicans are already up in arms over the failures of Solyndra and Beacon Power, which received loan guarantees under a different DOE program, and say the latest news fits a pattern.
“Instead of producing thousands of ‘clean energy’ jobs, the administration’s loan guarantee and grant programs are yielding another bankruptcy and the squandering of taxpayer dollars,” said Rep. Cliff Stearns (R-Fla.), chairman of the House Energy and Commerce Committee’s oversight panel. “This is another reason why the White House should not be picking winners and losers among American manufacturers.”
Stearns also questioned the timing of the announcement, which came just days after Obama touted renewable energy during his State of the Union address.
“It is interesting that Ener1 made the filing after the president touted subsidies for batteries given that the administration asked Solyndra to hold off the announcement of job losses until after the 2010 elections,” Stearns said.
In November, House Republicans released emails in which an adviser to Argonaut Private Equity, a major backer of Solyndra, wrote that DOE officials “did push very hard for us to hold our announcement of the consolidation to employees and vendors to Nov. 3,” the day after the midterm elections. The adviser added that “oddly they didn’t give a reason for that date.”
DOE stressed that Ener1 is not going under and said its technology is sound.
“This grant is part of the department’s efforts to commercialize promising vehicle technologies that will help America to reduce our dependence on foreign oil and ensure U.S. companies can compete in the global auto industry,” DOE spokeswoman Jen Stutsman said in an email. “While it’s unfortunate that Ener1, the parent company, has entered a restructuring process, the new infusion of $80 million in private capital demonstrates that the technology has merit.”
DOE has paid out almost $55 million of the grant. It stopped payments last year after Ener1 began faltering and was pulled from trading on NASDAQ.
Stutsman said DOE will pay out the remainder of the grant dollar for dollar to match the company’s investments.
EnerDel also received some federal contracts during the George W. Bush administration, including a $6.5 million contract in 2007 with DOE and a consortium of auto manufacturers that shared half the cost, and a $4 million battery R&D deal in 2008 from the Defense Department.
“Our business plan was impacted when demand for lithium-ion batteries slowed due to lower-than-expected adoption for electric passenger vehicles,” Ener1 CEO Alex Sorokin said in a statement. “We believe that the restructuring plan will enable us to address our business and financial challenges comprehensively, quickly and efficiently, and position us to compete much more effectively in the energy storage market.”
The company said all of its creditors are on board with the plan, which a district bankruptcy court must approve.
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