Think of it as a refi going to the highest bidder.

Bankrupt lithium-ion battery maker A123 Systems is looking to access a $50 million loan from China-based auto-component maker Wanxiang, which is offering terms at an interest rate that's three percentage points lower than competing bidder Johnson Controls, the Wall Street Journal reports.

A123, which declared bankruptcy earlier this month after incurring more than $875 million in losses during the past five years, received an offer from Wanxiang to buy 80 percent of the company for $465 million before the bankruptcy filing. Since A123 declared bankruptcy, the company's automotive business received a $125 million bid from Johnson Controls, which included access to a loan at a 15 percent interest rate, the Journal said. Wanxiang, whose bid spurred opposition from lawmakers because A123 had received funding from the US government, may put in another offer.

Customers of A123, which has taken out $132 million in federal grants, include BMW, General Motors and extended-range plug-in vehicle maker Fisker.

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