NEW YORK Exide Technologies Inc., a leading producer and recycler of lead-acid batteries, has filed for Chapter 11 bankruptcy protection, listing assets of about $1.89 billion and liabilities of about $1.14 billion.
The Milton, Ga.-based companys 20 largest creditors hold unsecured claims in excess of $71 million, according to documents filed June 10 in U.S. Bankruptcy Court in Delaware. Some of the largest unsecured creditors listed in the petition are metals companies, including Fort Smith, Ark.-based Copperfab Inc. and Lancaster, N.Y.-based Seibel Modern Mfg & Welding Corp. Neither company immediately returned calls for comment.
The battery maker cited a number of factors that contributed to a sharp decline in the companys earnings and liquidity position, including rising production costs, compressed margins, intense domestic competition, exposure to the struggling European market and constrained liquidity due to downgrades from credit-ratings agencies.
The news comes on the heels of several months of turmoil for Exide, including the suspension of operations at its Vernon, Calif., recycling facility following a company report that showed hazardous waste had degraded the facilitys underground pipes, releasing water bearing toxic metals into the soil (amm.com, April 25
Prior to notice of the plants temporary shutdown, a class-action lawsuit was filed in connection with alleged arsenic emissions at the facility (amm.com, April 17
As a result of the Vernon shutdown and the companys poor financial performance in the fourth fiscal quarter of 2013, it became apparent that a successful out-of-court restructuring was unlikely, Phillip Damaska, Exides executive vice president and chief financial officer, said in the filing.
Damaska added that with approximately $31 million in interest payments due in August 2013 and the upcoming maturity of $51.9 million remaining in convertible notes due in September 2013, the company was forced to implement a restructuring plan to address these near-term liquidity events.
The filing only applies to Exides U.S. parent company, and global businesses will continue to operate during reorganization, the company said.
Operations both in the U.S. and in the rest of the world will continue to serve customers in a timely manner with the same quality products and outstanding customer care as they did before the filing, James R. Bolch, president and chief executive officer of Exide, said in a statement.
All post-filing obligations to U.S. suppliers will be paid on time and within terms. We intend to pay U.S. employees as usual and do not expect any material changes to their benefits. Outside of the U.S., obligations to employees and suppliers will not be impacted by the filing.