Exide: Noteholders’ plan proposal ‘a significant step forward’ in case

By Caroline Salls

Pittsburgh, June 30 – Exide Technologies received a non-binding plan of reorganization proposal from an official committee of senior secured noteholders, according to a news release.

The company said the committee members hold a substantial majority of the its debtor-in-possession facility term loan and pre-bankruptcy senior secured notes.

According to the release, the non-binding plan proposal calls for substantial deleveraging of Exide’s debt by more than $700 million, a sizable investment of new equity capital and new debt to fund the Exide Chapter 11 emergence and post-emergence business.

The new debt includes liquidity and working capital to support the company’s operations, seasonality and growth of its businesses, capital improvements and environmental, health and safety investments.

Exide said the proposed new equity investment would comprise an issuance of $300 million of preferred convertible equity, a portion of which would be issued in connection with a rights offering backstopped by some committee members. The balance would come as a direct equity purchase by committee members.

The company said the proposed $185 million new debt issuance would also be backstopped by some committee members.

The non-binding proposal also includes a new asset-based loan facility, the commitments for which would be obtained from third-party lenders in conjunction with the plan confirmation process.

All of the transactions included in the non-binding proposal would be subject to various conditions, including filing of Exide’s audited financial statements and completion of an investigation.

Exide said it believes the proposed plan and related transactions would position it to execute its comprehensive five-year business plan under which all of its global groups would remain operational.

The company said it plans to evaluate the proposal and continue discussions with members of the committee and other stakeholders.

“Since filing for Chapter 11 restructuring in June 2013, Exide has made substantial progress in improving operations and developing a five-year business plan while continuing to service our customers,” president and chief executive officer Robert M. Caruso said in the release.

“We believe the [committee’s] proposal is a significant step forward in our Chapter 11 process.”

The company expects to emerge from Chapter 11 by the end of 2014, the release said.

Exide Technologies, a Milton, Ga.-based maker and recycler of lead-acid batteries, filed for bankruptcy on June 10, 2013 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 13-11482.

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