Exide Technologies (“Exide” or the “Company”), a global provider of stored energy solutions, today announced a comprehensive strategy to best position its businesses in North America, EMEA, and Asia-Pacific to benefit its employees, customers, suppliers, and other stakeholders across the globe. This strategy is designed to restore the Company’s liquidity, which had deteriorated further as a result of the unprecedented global health and economic impact of the COVID-19 pandemic, while the Company pursues a sale of its assets.
To facilitate a value-maximizing sale of its North America, EMEA, and Asia-Pacific businesses and further advance ongoing discussions with potential buyers, the Company and certain of its U.S. subsidiaries have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.
The Company has separately reached an agreement to sell its EMEA and Asia-Pacific business to an ad hoc group of its noteholders, subject to certain conditions outlined in the transaction documents, and subject to higher or better offers. This business is not included in the Chapter 11 proceedings and continues to operate as usual.
Tim Vargo, Chairman, President, and Chief Executive Officer of Exide commented that, the company’s actions were intended to position their businesses around the world for future growth and profitability while also providing the greatest benefit to their employees, customers, and other stakeholders. He added that, their Board of Directors determined that, given the continued, unsustainable impact on company’s cost structure resulting from legacy liabilities in North America, and in light of the global economic COVID-19 slowdown that had amplified the pressures, a sale of their North American operation through a court-supervised process would provide the best opportunity to continue delivering high-quality energy storage solutions and service to their customers.
Vargo continued to say that, they believed that this was an attractive business, and they are already advanced in a robust marketing process that included active engagement with a number of potential strategic and financial buyers. The company was pleased with the interest to date and looked forward to continued discussions about new ownership that would drive forward their businesses in North America, EMEA, and Asia-Pacific. They would like to thank all of their employees for the unwavering commitment and hard work during the time of transition.
Exide has obtained a commitment for debtor-in-possession (“DIP”) financing of $40 million from a group of lenders, including certain of its existing noteholders. Subject to Court approval, this DIP financing will provide sufficient liquidity to support ongoing operations in North America for the duration of the sale process and restructuring.
To ensure a smooth transition into Chapter 11, the Company filed with the Court a series of customary motions seeking to uphold its commitments to its valued employees, customers, and other stakeholders during the process. These “first day” motions include requests to continue to pay wages and provide benefits to employees in the normal course and otherwise operate the business as usual to facilitate the continued manufacturing and delivery of product to customers, without interruption. The Company is also filing a motion to initiate a competitive bidding process under Section 363 of the Bankruptcy Code, designed to achieve the highest or otherwise best offers, for the North American, EMEA, and Asia-Pacific businesses.
During the proceedings, Exide is committed to working collaboratively with the relevant local, state, and federal agencies to achieve an orderly transfer or sale of its non-operating properties in the U.S., including its former battery recycling facility in Vernon, California, and ensure they are maintained in a safe and responsible manner.