MILTON, Ga., June 10, 2013
/PRNewswire/ -- Exide Technologies, (Nasdaq: XIDE), a
global leader in stored electrical solutions, announced today that
it has filed a voluntary petition for reorganization pursuant to
U.S. federal restructuring laws in order to facilitate the
financial and operational restructuring necessary to strengthen its
balance sheet and its business to position the Company for future
success. The petition was filed in the District of Delaware.
Only Exide Technologies' United
States' operations, including the GNB Industrial Division,
are included in the filing. Exide Technologies' international
operations are excluded from the filing. The Company plans to
continue to operate globally without interruption during the
reorganization.
James R. Bolch, President and
Chief Executive Officer of Exide said, "Operations both in the U.S.
and in the rest of the world will continue to serve customers in a
timely manner with the same quality products, and outstanding
customer care as they did before the filing. All post-filing
obligations to U.S. suppliers will be paid on time and within
terms. We intend to pay U.S. employees as usual and do not
expect any material changes to their benefits. Outside of the U.S.,
obligations to employees and suppliers will not be impacted by the
filing."
Exide has negotiated a $500
million debtor-in-possession (DIP) financing facility to be
provided by a group of financial institutions and investors in
connection with the filing. Once approved by the Court, this
financing will enhance the Company's global liquidity position with
approximately $300 million in new
capital, in order to allow it to pursue its restructuring goals.
The proceeds of the DIP financing together with cash generated from
daily operations and cash on hand will be used to fund
post-petition operating expenses. Exide's global management team
will continue to manage both the U.S. and global businesses.
Mr. Bolch stated, "Our Company has been burdened by a highly
leveraged balance sheet which has limited our ability to
competitively invest in our businesses. Recently, our
profitability has been impacted by unprecedented increases in our
product costs -- driven primarily by the market price of scrap lead
in North America – as well as
operational challenges in the U.S. and Europe which we have been unable to fully
offset. After a great deal of consideration, we concluded a
restructuring of our balance sheet and our operations was the best
path forward for the Company."
"Our restructuring," he continued, "will allow us to strengthen
our balance sheet and complete the operational changes that build
upon the strategies that we have been pursuing. Over and above
these efforts, we intend to become even more aggressive in reducing
costs, taking actions with respect to underperforming business
segments and to focus on the most attractive areas for future
growth."
In order to help facilitate the Company's financial
restructuring, Exide's Board of Directors has named Robert M. Caruso as Chief Restructuring
Officer. Mr. Caruso is a noted financial restructuring expert
and a Managing Director of Alvarez and Marsal, a leading
restructuring firm. Bolch stated, "As we move forward with
Exide's restructuring, the Board concluded that we needed to have
personnel with restructuring expertise on our executive team in
order to implement critical objectives most effectively. We are
very fortunate to have the benefit of the expertise, experience and
demonstrated talent of Bob Caruso to
take on the role of Chief Restructuring Officer of Exide at this
important time. He and the resources he brings from Alvarez and
Marsal, will serve the Company and all of its constituencies very
well as we proceed with the job of restructuring Exide for the
future."
The Company has filed a variety of customary first day motions
seeking, among other things, authority to pay pre-filing wages,
salary and benefits and to honor customer programs.
Exide Technologies has also set up two separate toll-free
information lines: one for U.S. suppliers, 888-985-9831 and another
for other interested parties, 855-291-0287. More information
on Exide's U.S. restructuring is available on the Company's web
site, www.exide.com.
About Exide Technologies
Exide Technologies, with operations in more than 80 countries,
is one of the world's largest producers and recyclers of lead-acid
batteries. The Company's global business groups provide a
comprehensive range of stored electrical energy products and
services for industrial and transportation applications.
Transportation markets include original-equipment and
aftermarket automotive, heavy-duty truck, agricultural and marine
applications, and new technologies for hybrid vehicles and
automotive applications. Industrial markets include network power
applications such as telecommunications systems, electric
utilities, railroads, photovoltaic (solar-power related) and
uninterruptible power supply (UPS), and motive-power applications
including lift trucks, mining and other commercial vehicles.
Forward Looking Statement
This press release contains forward-looking statements with
respect to our Chapter 11 filing and related matters. These
forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause actual results,
performance or achievements to be materially different from those
expressed or implied by the forward-looking statements. Important
factors that could cause our actual results to differ materially
from those anticipated in the forward-looking statements include,
among other things: (i) the ability of Exide to develop, prosecute,
confirm and consummate the Chapter 11 plan of reorganization; (ii)
the potential adverse effect of the Chapter 11 filing on Exide's
liquidity and operations and the risks associated with operating
businesses under Chapter 11 protection; (iii) the ability of Exide
to comply with the terms of the DIP financing facility; (iv)
Exide's ability to obtain additional financing; (v) Exide's ability
to retain key management and employees, (vi) customer response to
the Chapter 11 filing; and (vii) the risk factors or uncertainties
listed from time to time in Exide's filings with the Securities and
Exchange Commission and with the U.S. Bankruptcy Court in
connection with the company's Chapter 11 filing. Other factors and
assumptions not identified above are also relevant to the
forward-looking statements, and if they prove incorrect, could also
cause actual results to differ materially from those projected.
Forward-looking statements speak only as of the date of this
release. We undertake no obligation to provide any updates or
revisions to any forward-looking statement to reflect any change in
our expectations or any change in events, conditions or
circumstances on which the forward-looking statement is based.
SOURCE Exide Technologies