Milton, Georgia-based battery producer Exide Technologies has started a Chapter 11 bankruptcy process for its North American operations while saying it has arranged for the separate sale of its operations in Asia and Europe. The company says the American Chapter 11 process is being undertaken “to facilitate” the later sale of its North American assets.
In a May 19 news release, Exide says it has arranged for “long-time lenders to acquire, fund and support its Europe, Middle East and Africa (EMEA) operations and its Asia-Pacific business unit. Those sales will occur separately from the Chapter 11 proceedings.”
The 8,000-employee company also says it has obtained $40 million in financing to support the continuity of operations in North America, as it attempts to “continue to serve customers as usual during [the] court-supervised sale process.”
It is the second bankruptcy or insolvency announcement concerning a lead-acid battery producer, following the announcement by France-based Recylex S.A. that its German subsidiaries were seeking insolvency protection in that nation.
Globally, Exide says it “recovers 99 percent of all lead received at our recycling centers. Every year we recycle millions of pounds of lead and recover and neutralize millions of gallons of sulfuric acid.” The company says in the United States alone it recycles some 17,500 tons of plastic (predominantly polypropylene) from end-of-life batteries, which is used to make new battery housings.
The company recycles the plastic at a plant in Reading, Pennsylvania, while it operates lead-acid battery recycling facilities in Muncie, Indiana, and Canon Hollow, Missouri.
Exide shuttered a battery recycling facility in Vernon, California, in 2015. It says in its May news release, “During the [bankruptcy] proceedings, Exide is committed to working collaboratively with the relevant local, state and federal agencies to achieve an orderly transfer or sale of its nonoperating properties in the U.S., including its former battery recycling facility in Vernon, California, and ensure they are maintained in a safe and responsible manner.”
“Our board of directors determined that, given the continued, unsustainable impact on our cost structure resulting from legacy liabilities in North America, and in light of the global economic COVID-19 slowdown that has amplified these pressures, a sale of our North American operations through a court-supervised process provides the best opportunity to continue delivering high-quality energy storage solutions and service to our customers,” says Tim Vargo, chair, president and CEO of Exide.
“Today’s actions are intended to position our businesses around the world for future growth and profitability while also providing the greatest benefit to our employees, customers, and other stakeholders,” he adds.
As part of its Chapter 11 filing, Exide has requested a series of motions that include requests to continue to pay wages and provide benefits to employees “and otherwise operate the business as usual to facilitate the continued manufacturing and delivery of product to customers without interruption.”
The company says it also filing a motion to initiate a competitive bidding process under Section 363 of the Bankruptcy Code, “designed to achieve the highest or otherwise best offers, for the North American, EMEA and Asia-Pacific businesses.”
Exide says vendors with questions about its bankruptcy filing can go to this web page.