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Battery bust Alevo liquidates, finds buyer for assets

After filing for Chapter 11 bankruptcy protection in August 2017, insolvent North Carolina lithium-ion battery startup Alevo USA Inc. and its affiliate Alevo Manufacturing Inc. will liquidate their assets through a Chapter 7 process, court filings show.

In a Feb. 12 motion to convert the case in the U.S. Bankruptcy Court for the Middle District of North Carolina, Alevo's legal counsel also revealed that an unnamed bidder has agreed to purchase Alevo's manufacturing equipment for $5 million. The company, which valued its manufacturing assets at between $10 million to $50 million, expects the transaction to close by Feb. 27, an attorney representing Alevo said by email.

Citing "financial problems" experienced by the debtors' parent companies in Switzerland, which include the privately held Alevo Group SA, Terri Gardner, with the law firm Nelson Mullins Riley & Scarborough LLP, said it has proved "very difficult" to sell the company's intellectual property "to achieve maximum value" and possibly enable continued production at the factory in Concord, N.C. An Alevo affiliate purchased the former Philip Morris cigarette manufacturing plant in 2014 for $68.5 million.

Likely buyer

After laying off nearly 300 employees in August, Alevo secured $5.7 million in financing to scale down operations between September and December 2017 and complete "proper processing" of its batteries so it could remove hazardous materials used in manufacturing, according to the Feb. 12 filing.

Alevo's liquidation, which Gardner already predicted in an interview in August, comes as several other U.S. lithium-ion battery manufacturing facilities ramp up to meet demand for electric vehicles and energy storage, including Tesla Inc. and Panasonic Corp.'s so-called "Gigafactory" in Reno, N.V. and startup Romeo Systems Inc.'s plant near Los Angeles.

The likely buyer of Alevo's equipment is the recently formed Imperium3 New York Inc., which plans to invest more than $130 million to build a lithium-ion battery manufacturing facility in Endicott, N.Y. Although the company has declined to confirm its bid for Alevo's equipment, one materials supplier and equity participant in the project, Magnis Resources Ltd., revealed Feb. 8 that Imperium3 New York "placed the winning bid for the acquisition of near new lithium-ion battery manufacturing equipment currently located in North Carolina." Magnis' description of the assets is identical to those advertised in Hilco Industrial's auction of Alevo's equipment.