US lead-acid battery maker Exide Technologies has agreed to sell its EMEA and Asia Pacific business and plans to sell its North America interest as it faces down its third Chapter 11 crisis in two decades.
The announcement comes as the company and some of its US subsidiaries filed voluntary Chapter 11 petition of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.
The Georgia-headquartered firm began voluntary Chapter 11 proceedings to facilitate the sale of its North American operations.
In a letter to its suppliers on 19 May, the firm said it had entered into an agreement to sell the EMEA and Asia Pacific business to an ad-hoc group of its noteholders.
The agreement includes a “go-shop” period with a bid submission deadline of 1 July and an auction scheduled for 7 July.
The EMEA and South Pacific business is not included in the Chapter 11 proceedings and continues to operate as a stand-alone company independent from Exide Americas.
As part of the EMEA and Asia Pacific agreement, the noteholder group has provided additional cash of up to $75 million.
Exide has obtained a commitment for debtor-in-possession (DIP) financing of $40 million from a group of lenders, including existing noteholders, to provide “sufficient liquidity to support ongoing operations in North America for the duration of the sale process and restructuring”.
A letter signed by Stefan Stübing president EMEA & APAC, said there would be no expected change for its suppliers as a result of this announcement.
The letter said: “This is an exciting development for our business, which will allow us to emerge even stronger from the current economic downturn, and to continue to innovate around our customers’ evolving energy storage needs.
Exide’s EMEA and Asia-Pacific business entered the current crisis in good financial health, and we have acted prudently throughout to mitigate the impact of the situation and associated partial lockdown.”
“Today’s announcement provides stability for our business and our suppliers at a difficult time for the industry, and we remain focused on our relationship with you to deliver the industry leading products and services we have become known for.”