A court has approved Ener1's plan to emerge from bankruptcy, the parent company of locally based EnerDel announced Wednesday.

The New York-based electric-car power company, which filed for Chapter 11 protection late last month, expects to come out of the court reorganization by mid-March.

Under Ener1's plan, it will secure up to $86 million in new equity funding and restructure its long-term debt. In addition to the added funding, Ener1 said some creditors have also agreed to restructure their debt in a partial debt-for-equity exchange.

All of the current common stock will be cancelled when the plan becomes effective — expected in the next two weeks. New common and preferred stock will be issued.

The company has been hurt by heavy competition from other countries, especially China.

Ener1 Inc. was the third company to seek bankruptcy protection after receiving assistance from the Energy Department under the economic stimulus law.

Ener1 subsidiary EnerDel received a $118 million stimulus grant from the Energy Department in 2009. California solar panel maker Solyndra Inc. and Beacon Power, a Massachusetts energy-storage firm, declared bankruptcy last year. Solyndra received a $528 million federal loan, while Beacon Power got a $43 million loan guarantee.

At one time, Ener1 leaders said they planned to have 1,400 employees working in Indianapolis-area operations before 2015, but local employment slipped from about 380 in March 2011 to roughly 250 by November. The company dismantled its management team late last year after several setbacks.

EnerDel operates from a Hague Road headquarters, a facility in Noblesville and leased factory space in the Mount Comfort area of Hancock County.