U.S. bankruptcy court approves restructuring of Ener1

According to PR News, the bankruptcy court in the southern part of New York City announced that it has approved the restructuring of battery maker Ener1.

Ener1 will be exempt from bankruptcy, and it will conduct equity financing to support the company's normal operations. In addition, the shareholders who currently hold the company’s senior notes and convertible notes have agreed to restructure the debt-to-equity swaps. After the reorganization plan goes into effect, Ener1’s existing common stock will be cancelled and it will reissue ordinary and preferred stocks.

On January 27 this year, after fierce competition and the loss of a major customer, American battery maker Ener1 applied to the Manhattan Court for bankruptcy protection under Chapter 11 of the US Bankruptcy Code.

According to court documents, Alex Sorokin, Ener1's interim chief executive, said that the company faces increased competition from other battery makers, such as Toyota Motor and rivals in China and Korea, whose production costs are lower.

Alex Sorokin also stated that the bankruptcy of Think Global in June 2011 caused damage to the company. Think Global was a major customer of the company and its bankruptcy led to the planned restatement of the financial report by Ener1.