May 20, 2020 7:23 PM

Exide begins bankruptcy process

Posted May 20, 2020 7:23 PM
<b>The Salina Exide plant at 413 East Berg Road.</b> Salina Post photo
The Salina Exide plant at 413 East Berg Road. Salina Post photo

Exide Technologies has begun the Chapter 11 bankruptcy process.

Exide announced "a comprehensive strategy to best position its businesses in North America, EMEA, and Asia-Pacific to benefit its employees, customers, suppliers, and other stakeholders across the globe. This strategy is designed to restore the company’s liquidity, which had deteriorated further as a result of the unprecedented global health and economic impact of the COVID-19 pandemic, while the Company pursues a sale of its assets," the company reported in a news release issued Tuesday. 

To facilitate a value-maximizing sale of its North America, EMEA, and Asia-Pacific businesses and further advance ongoing discussions with potential buyers, the Exide and certain of its U.S. subsidiaries have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. 

The company has separately reached an agreement to sell its EMEA and Asia-Pacific business to an ad hoc group of its noteholders, subject to certain conditions outlined in the transaction documents, and subject to higher or better offers. This business is not included in the Chapter 11 proceedings and continues to operate as usual.

“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,” said Tim Vargo, chairman, president, and chief executive officer of Exide. “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. 

“We believe this is an attractive business, and we are already advanced in a robust marketing process that includes active engagement with a number of potential strategic and financial buyers,” Vargo continued. “We are pleased with the interest to date and look forward to continued discussions about new ownership that will drive forward our businesses in North America, EMEA, and Asia-Pacific. I’d like to thank all of our employees for their unwavering commitment and hard work during this time of transition.”

Exide has obtained a commitment for debtor-in-possession (“DIP”) financing of $40 million from a group of lenders, including certain of its existing noteholders. Subject to Court approval, this DIP financing will provide sufficient liquidity to support ongoing operations in North America for the duration of the sale process and restructuring. 

To ensure a smooth transition into Chapter 11, the Company filed with the Court a series of customary motions seeking to uphold its commitments to its valued employees, customers, and other stakeholders during the process. These “first day” motions include requests to continue to pay wages and provide benefits to employees in the normal course and otherwise operate the business as usual to facilitate the continued manufacturing and delivery of product to customers, without interruption. The Company is 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.  

During the proceedings, Exide is committed to working collaboratively with the relevant local, state, and federal agencies to achieve an orderly transfer or sale of its non-operating 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. 

Capitalizing on the Strength of Operations in EMEA and Asia-Pacific 

Separately, Exide has entered into a restructuring support agreement under which an ad hoc group of the Company’s noteholders would acquire its EMEA and Asia-Pacific business, subject to certain conditions outlined in the transaction documents, and subject to higher or better offers. The new owners intend to maintain continued employment of the Company’s workforce in these regions. The agreement includes a “go-shop” period with a bid submission deadline and auction to be held in early July 2020. 

“We have been steadily growing revenue and market share in EMEA and Asia-Pacific over the past few years,” said Vargo. “As our lenders have learned more about this business, they were impressed by its growth trajectory, loyal customer base, and talented employees. Their increased support reflects their confidence in our capability to deliver consistent growth and profitability by bringing to market innovative technologies for energy storage across each business segment to benefit our customers. We are pleased to have found a new owner that is committed to supporting the next phase of growth of our business in these regions.”

As part of the agreement, the ad hoc noteholder group has provided additional liquidity of up to $75 million to ensure that business remains in a strong financial position during the adverse economic impacts created by the COVID-19 crisis. 

Vargo continued, “The EMEA and Asia-Pacific business entered the current crisis in good financial health, and we have acted prudently throughout and, in some cases, have drawn on the support mechanisms made available by governments to mitigate the impact of the crisis and associated lockdown. The additional funding provided as part of this agreement will ensure that this business will emerge from the current crisis even stronger.”

Continue Reading Salina Post
May 20, 2020 7:23 PM
City announces temporary hours for Drive-thru Recycling Center

The Salina Drive-thru Recycling Center (SDRC) is scheduled to reopen on June 3 with several modifications to its operating hours and procedures, resulting from expected budget shortfalls due to the COVID-19 pandemic and the April safer-at-home order.

Temporary hours of operation

•Wednesday through Friday, 8 a.m. to 4 p.m.

•Saturdays, 8 a.m. to noon

Vehicle traffic

•Long lines are expected during the first few weeks. Please be patient as we work to process a higher than normal amount of recyclables.

•There may be two lines formed with separate trucks within the fenced-in area, one inside the building and one outside the building (on the north side) to help facilitate a larger number of customers.

•Motorists may be directed to turn left (south) when exiting the facility onto the gravel area to prevent traffic jams from the anticipated line of cars and the construction on North Street between Santa Fe Avenue and North Ninth Street.

•As the number of customers is reduced, staff may return to its normal operation of a single lane of traffic inside the building only and allow exiting in either direction.

Plastic bags

•Plastic bags will no longer be accepted for transporting recyclables (paper, newsprint, plastic containers, aluminum, steel, cardboard, etc.).

•Plastic bags will continue to be allowed for transporting shredded paper only.

End-of-day gate closure

•At about 3:45 p.m. (Wednesday – Friday) and 11:45 a.m. (Saturdays), a staff member will walk the line of customers, if any, and inform them the facility will be closing in 15 minutes.

•At 4 p.m. on weekdays and noon on Saturdays, the gates will be closed. Anyone waiting in line outside the gates will have to come back when the facility is opened again.

The Household Hazardous Waste (HHW) facility will remain closed for the time being. A separate announcement will be provided to the public when it is reopened.  

If you have any questions, please call General Services at (785) 309-5750.