Exide noteholders to receive 29%-37% recovery under new reorganization plan

By Peter Heap

New York, March 1 - Holders of Exide Technologies Inc.'s 10% senior notes will receive an estimated recovery of 28.9% to 37.2% under the company's latest reorganization plan.

Meanwhile owners of its 2.9% convertibles will receive an estimated recovery of 4.3% to 5.5%.

The projections are included in Exide's joint plan of reorganization, proposed by the company and the official committee of unsecured creditors.

The document dated Feb. 27 has now been filed with the U.S. Bankruptcy Court for the District of Delaware.

Exide had to come up with the new plan after the bankruptcy court refused on Dec. 30 to confirm its previous plan, the fourth amended, because it did not believe the proposed plan was fair and equitable.

The judge generally agreed with complaints from creditors that the fourth amended plan undervalued the company. The judge also noted that unsecured creditors voted overwhelmingly against the plan.

Under the revised plan, the Princeton, N.J., lead acid battery company's pre-petition lenders will get 90% of the equity in reorganized Exide.

Unsecured creditors would get 10% of the reorganized company's equity along with warrants that would increase their stake to 28%.

In detail, the plan proposes treating claims as follows:

* DIP facility lenders with $192.4 million in claims will receive payment in full;

* Pre-petition credit facility lenders with $802.7 million in claims will receive either 90% of the reorganized company's common stock for a projected recovery of $798.0 million or 99.4%, or 90% of the reorganized company's common stock plus pre-petition foreign credit facility secured claims under an amended agreement for a projected recovery of $18.1 million or 35.9%;

* General unsecured creditors with $303.8 million in claims will share in the distribution of 10% of reorganized Exide's stock and the warrants for a projected recovery of $49.7 to $64.1 million or 16.4% to 21.1%;

* Holders of Exide's 10% senior notes due 2005 with $314.9 million in claims will receive 86.67% of the stock and warrants to be distributed to noteholders for a projected recovery of $90.9 to $117.2 million or 28.9% to 37.2%;

* Holders of Exide's 2.9% convertible senior subordinated notes due 2005 with $325.8 million in claims will receive the other 13.33% of stock and warrants to be distributed to noteholders for a projected recovery of $14.0 to $18.0 million or 4.3% to 5.5%;

* Equity holders will receive nothing.

The agreed distribution to noteholders and convertible holders also settles various disputes including pending appeals by Smith Management LLC and the trustee for the convertibles. R2 and Turnberry Capital Management, significant holders of the 10% notes, have also agreed to the plan.

Exide expects to have $540 million of debt when it emerges from Chapter 11, down $1.3 billion.

Exit financing has been arranged with Deutsche Bank AG New York branch.

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