Exide files for Chapter 11 bankruptcy protection

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Associated Press

Posted on June 10, 2013 at 10:06 AM

MILTON, Ga. (AP) — Battery maker Exide Technologies is seeking Chapter 11 bankruptcy protection as it attempts to restructure its U.S. business.

The Milton, Ga., company said its international operations are excluded from the filing, which it made Monday in U.S. Bankruptcy Court in Delaware.

Exide Technologies makes batteries for vehicles and also provides stored electrical energy services for industrial applications.

It said a highly leveraged balance sheet has limited its ability to invest in its businesses, and unprecedented increases in product costs have hurt its balance sheet. Those increases have been driven mainly by the North American market price for scrap lead.

Exide's voluntary petition for Chapter 11 protection prevents debt collectors from collecting amounts owed by the company. It does not change the work schedules of its plants, corporate offices or branches, and the company expects to continue serving both U.S. and international customers.

The company also said it plans to pay U.S. employees as usual, and it does not expect material changes to their benefits.

Exide says it has negotiated $500 million in financing that will help cover operating expenses after the filing. Its board of directors also has named Robert M. Caruso chief restructuring officer. Caruso is a managing director of the restructuring firm Alvarez and Marsal.

The battery maker said in April it had hired the financial advisory firm Lazard to help it explore financing options. It had reported a string of quarterly losses before then.

Shares of Exide have plunged since closing 2012 at $3.42. The stock closed at 20 cents on Friday and then fell another 6 cents, or 31 percent, Monday before markets opened.

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