Exide Technologies, the US battery producer, and certain of its US subsidiaries, have filed voluntary petitions for relief under Chapter 11 of the US Bankruptcy Code.
The Company said that it elected to file for reorganisation because it offered the most efficient way to restructure its balance sheet and access new working capital while continuing to operate in the ordinary course of business.
The Company’s operations outside of the US are not included in the filing and will not be adversely affected.
Exide said that its heavy debt burden, caused largely by a debt-financed global acquisition strategy and the costs of integrating these acquisitions, combined with the current economic conditions, has made it necessary for it to file for reorganisation to address its financial leverage and debt burden.
The Company said that it has arranged for $415 million in new financing, including $250 million in debtor-in-possession (DIP) financing provided by Citicorp and other financial institutions, and $165 million in financing provided by Citibank and other financial institutions for the entities outside of the US that are not filing.
Exide said it has requested, and expects to receive, Court approval to pay employee salaries, wages and benefits in the normal course of business, as well as continue to meet customer demands and supply products.