Troubled battery maker Exide Technologies Inc. (XIDE) filed for
Chapter 11 bankruptcy protection early Monday as it faced $31
million in interest payments in August and the maturity of nearly
$52 million in convertible notes in September.
The Milton, Ga., company, which sought Chapter 11 protection in
the U.S. Bankruptcy Court in Wilmington, Del., plans to "implement
a restructuring that would result in a de-levered balance sheet and
a sustainable capital structure," Chief Financial Officer Phillip
A. Damaska said in court papers.
The company has lined up a $500 million bankruptcy loan from
J.P. Morgan Chase & Co. (JPM) to fund its restructuring.
The filing is Exide's second. It emerged from an earlier Chapter
11 restructuring in 2004.
The company makes Exide- and NorthStar-branded lead-acid
batteries for vehicles and other machines. Its customers include
auto makers, parts suppliers and retailers.
Exide, which employs about 10,000 people in more than 80
countries, listed assets of about $1.9 billion and debts of $1.1
billion in its Chapter 11 petition.
Its profits have fallen amid high production costs, tight
liquidity and stiff competition from its main competitor, Johnson
Controls Inc. (JCI).
In court papers, Exide said Wal-Mart Stores Inc.'s (WMT)
decision to designate Johnson Controls as its sole supplier of
transportation batteries resulted in a loss of about $160 million
in annual revenue.
The company is also grappling with troubles at a California
lead-recycling facility that supplies a "significant portion" of
its domestic lead. In April, Exide was forced to suspend operations
at the Vernon, Calif., plant under an order from the California
Department of Toxic Substances Control, which claimed the
facility's storm-water system violated state regulations.
Exide said the shutdown will wipe out about $24 million in
projected earnings before interest, taxes, depreciation and
amortization.
-Emily Glazer contributed to this article.
(Dow Jones Daily Bankruptcy Review covers news about distressed
companies and those under bankruptcy protection. Go to
http://dbr.dowjones.com.)
Write to Marie Beaudette at marie.beaudette@dowjones.com.
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