Exide's Negative Impact on Other Communities, Lastest News

BREAKING NEWS: Wall Street Journal Report – Exide preparing for potential bankruptcy-protection filing by summer

THE WALL STREET JOURNAL

Exide Technologies Prepares for Bankruptcy Filing

June 6, 2013, 4:26 p.m. ET

By EMILY GLAZER

Exide Technologies Inc.,( XIDE -16.38%) the car- and machine-battery maker, is preparing for a potential bankruptcy-protection filing by this summer, said people familiar with the matter.

The Milton, Ga., company, which faces a September debt payment, will likely seek Chapter 11 protection for the second time in a decade in a move known in restructuring circles as a “Chapter 22,” these people said.

Any Chapter 11 filing isn’t expected to include the company’s European operations, a person familiar with the situation said. These operations account for more than half of the company’s revenues.

The company, which makes and recycles lead-acid batteries for vehicles and other machines, has suffered from declining profitability due in part, it has said, to steep restructuring expenses, weaker-than-expected demand in some markets and higher lead-input costs.

It also has contended with scrutiny at a California battery-recycling facility, where operations are currently suspended pending the outcome of a public hearing amid allegations the company’s storm-water system violated state regulations. The company has said it is “evaluating its legal and regulatory remedies.”

Exide, which employs about 10,000 people with operations in more than 80 countries, carries roughly $700 million in debt. Creditors and analysts are concerned that Exide, which says it supplies BMW AG, BMW.XE -1.84% Fiat SpA, F.MI -5.81% Nissan Motor Co. 7201.TO -2.55% and other manufacturers, won’t be able to repay a roughly $56 million convertible note due in September, some of these people said.

Restructuring lawyers at Skadden, Arps, Slate, Meagher & Flom LLP are working with the company, while law firm Akin Gump Strauss Hauer & Feld LLP is advising an independent board committee, the people said. Paul, Weiss, Rifkind, Wharton & Garrison LLP is working with some bondholders and Andrews Kurth LLP is working with convertible-note holders, these people said.

Turnaround firm Alvarez & Marsal is working with the company, investment bank Houlihan Lokey is working with some bondholders and Moelis & Co. is working with convertible-note holders, they added.

In early April, Exide disclosed it retained Lazard Ltd. LAZ +2.45% to review options for reworking its finances. Shares sank about 48% to $1.37 after Debtwire initially reported the Lazard hiring. The shares closed at 34 cents Thursday, down 16%.

Also in April, Exide said it was suspending operations at a Vernon, Calif., secondary lead-recycling facility to comply with an order from the California Department of Toxic Substances Control. The company had said it didn’t know how long the suspension of operations at the Vernon facility will last but that the facility provides a “significant portion” of its domestic lead requirements.

In the most recent quarter for which the company reported results, ended Dec. 31, 2012, Exide had a $15.4 million loss, compared with a profit of $68.2 million a year earlier.

Some ratings firms, including Standard & Poor’s, lowered their ratings on Exide further into junk territory following the April announcements.

Write to Emily Glazer at emily.glazer@wsj.com

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THE FRISCO ENTERPRISE

Exide reportedly planning bankruptcy filing

Exide Technologies’ lead-acid recycling plant in Frisco is more than 75 percent demolished, though demolition has been behind schedule. What impact a potential bankruptcy filing by Exide would have on the cleanup is not yet known. Photo by Kelsey Kruzich.

By Anthony Tosie, atosie@starlocalnews.com, @anthonytosie on Twitter

Published: Friday, June 7, 2013 2:54 PM CDT
Exide Technologies is reportedly planning a bankruptcy filing to take place in the coming months following accusations of environmental violations at a California plant similar to its recently closed Frisco plant.

According to a Thursday report from The Wall Street Journal citing “people familiar with the matter,” the lead-acid battery manufacturer and recycler will file for bankruptcy this summer. Exide would likely file for Chapter 11 bankruptcy protection, which would allow the company to continue day-to-day operations and reorganize its businesses.

Exide previously filed for bankruptcy in 2002 after accumulating $2.5 billion in debt. The company exited bankruptcy in 2004 after a judge approved a plan to cut $1.3 billion of its debt.

An Exide spokeswoman did not respond to multiple requests for comment.

Last summer, Exide agreed to close its Frisco plant and transfer about 180 acres of land surrounding it to the city in exchange for $45 million. The plant ceased operations on Nov. 30 and is currently in the process of being demolished while the land surrounding it is remediated to agreed-upon toxicity levels monitored by the Texas Commission on Environmental Quality.

City officials said Exide won’t receive the money until cleanup is complete.

The city of Frisco released the following statement Thursday regarding the report: “According to the news articles related to the subject, Exide has not filed bankruptcy. The city of Frisco continues to monitor the situation. Pursuant to its contract with the city of Frisco, Exide continues to demolish its Frisco facility and is preparing for the plant’s permanent closure.”

California regulators ordered the closure of Exide’s Vernon, Calif., lead-acid battery recycling plant on April 24 following allegations of safety violations. According to regulators, Exide’s hazardous waste and emissions posed “an unacceptable risk to human health.” Exide is currently appealing the closure.

Exide’s stock has plummeted in recent months following the Vernon plant’s closure; the company’s stock price was $0.23 in after-hours trading Thursday, down from a 52-week high of $3.77.

At the most recent public meeting hosted by Exide regarding its Frisco plant’s closure, environmental advocacy groups overseeing the plant’s closure told The Frisco Enterprise that the company’s uncertain financial situation should worry residents.

“The biggest issue that’s not on the agenda tonight is whether this company is even going to be around in a few months,” said Jim Schermbeck, director of Downwinders at Risk, at the May 9 meeting. “On one hand you have this company that’s increasingly losing money, and on the other side you have this site that increasingly needs money to be cleaned up — that’s not a happy ending usually.”

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DALLAS MORNING NEWS

Exide preparing for potential bankruptcy-protection filing, reports Wall Street Journal

Exide Technologies is preparing for a potential bankruptcy-protection filing by this summer, The Wall Street Journal reported Thursday, citing unnamed sources.

Exide officials could not be reached for comment. Last month the company confirmed that it had hired an outside firm to work on financing alternatives. Exide said at that time that it would not comment further until the process is complete.

Exide, with operations in more than 80 countries, is involved in an extensive cleanup of contamination related to its shuttered plant in Frisco. City of Frisco officials said Thursday they are monitoring the situation. In the meantime, they said, work continues toward permanent closure of the Frisco site. State and federal regulators are overseeing that work.

A settlement agreement calls for Frisco to buy about 170 acres of buffer property from Exide once cleanup is complete. Exide is tapping into $6 million set aside for demolition and cleanup as part of that agreement. A total cost for the project has not been released.

The environmental group Downwinders at Risk said the possibility of bankruptcy is worrisome.

“Exide doesn’t have the money to provide a first-rate cleanup in Frisco, and we can’t rely on EPA to do a timely clean-up under the Superfund program,” said Jim Schermbeck, the group’s director. “Only the city of Frisco has the motivation to properly clean up and reclaim the Exide property instead of letting it become one of the region’s largest toxic waste dumps. We need the city to tell residents how they plan to return the Exide site to normal use.”

 

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