The US Bankruptcy Court in Delaware has told Exide Technologies that it must set money aside for a clean up operation in Frisco, Texas, in order to secure debtor-in-possession financing (DIP). Lending group JPM Chasemore has provided US$500 million as part of the Chapter 11 bankruptcy proceedings.
Access to this finance allows the company to continue its operations, pay employees and purchase goods and services. Exide voluntarily entered the bankruptcy proceedings on June 10th to reorganise the company’s finances.
Questions had previously been raised over Exide’s ability to respond to environmental clean up demands related to its plant in Frisco. Regulators warned in court that the company might fail to fulfil the obligation if DIP financing was approved. However, the judge ruled that the company had sufficiently provided for the clean up in its financial plan.
The city of Frisco has demanded US$5 million be set aside for a clean up operation after lead contamination was found in and around the Exide site. The secondary smelter had been operating in the city since 1964 and was acquired by Exide in 2000.