Exide, a Big Maker of Car Batteries, Files for Bankruptcy

[Dave]

Exide, a Big Maker of Car Batteries, Files for Bankruptcy
BY MICHAEL J. DE LA MERCED
Exide Technologies, a major manufacturer of car and truck batteries, filed for bankruptcy protection on Monday as it sought to repair its finances amid rising costs for materials and the shutdown of an important operation.

As of March 31, Exide had $1.9 billion in assets and $1.1 billion in liabilities, according to a court filing with the federal bankruptcy court in Delaware.

The company will continue to operate normally while in Chapter 11, and has secured $500 million in financing from JPMorgan Chase to keep its operations running. It also named Robert M. Caruso of the consulting firm Alvarez & Marsal as its chief restructuring officer.

In a court filing, the company cited the price of scrap lead in North America, which accounts for 40 percent of its costs of goods sold. It has also grappled with intense competition from its primary rival, Johnson Controls, which poached Wal-Mart Stores as an exclusive customer.

Exide had also struggled with its big exposure to the European market, which makes up more than 51 percent of its revenue. The company also faced $31 million in debt interest payments due in August and $51.9 million worth of bonds maturing in September.

In perhaps the final straw, Exide experienced an enormous setback when California’s Department of Toxic Substances Control ordered the suspension of a lead recycling facility for failing to comply with state regulations.

Exide’s shares have fallen 92 percent in the last 12 months, closing on Friday at 20 cents apiece.

“Our restructuring will allow us to strengthen our balance sheet and complete the operational changes that build upon the strategies that we have been pursuing,” James R. Bolch, Exide’s chief executive, said in a statement. “Over and above these efforts, we intend to become even more aggressive in reducing costs, taking actions with respect to underperforming business segments and to focus on the most attractive areas for future growth.”

Its biggest unsecured creditors include Wilmington Trust, which represents $51.9 million worth of bonds, and the Oracle Corporation.

The company, based in Milton, Ga., has 3,600 employees.

 

[Mike]

Wow!

 

[1leg]

Not the first time!

From wiki website.
n 2002 Exide filed for bankruptcy after compiling a debt of $2.5 billion as a result of the recent acquisitions.[4] In April 2004, a judge approved the company's plan to eliminate $1.3 billion in debt and exit bankruptcy protection by the end of the month[5]

In June 2013 Exide again filed for Chapter 11 bankruptcy protection with the aim of cutting debt and implementing a restructuring plan to better compete in the market (Exide Technologies, Case No. 13-11482, U.S. Bankruptcy Court, District of Delaware).

I hate to see Americans lose their jobs but poorly run companies should be allowed to die, or better the CEO should be made to pay with jail time. I say 1 year for every job lost or millions in debt.

 

[Dave]

I hate to see Americans lose their jobs but poorly run companies should be allowed to die, or better the CEO should be made to pay with jail time. I say 1 year for every job lost or millions in debt.

I agree that poorly run companies should be allowed to fail.

 

[Hilldweller]

They're one exit up from my office, around the corner from the Costco that I go to.
I've heard things about them...
...citing the Walmart thing is interesting; it wasn't all that recent. Like 1Leg said, it was a long time in the making.

 

[Joker]

It’s a brilliant plan, “Hey we can make more money if we just stop paying all the loans we owe, you know like the Banks won’t care because the Govt will bail them out. The tax payers won’t mind, we’re saving jobs.”

When it’s all said and done the Execs, Bankers, and Politicians (Both Parties) will all vacation together in a resort in Monaco…because they can still afford it.

I agree when a loan isn't repaid due to miss management the entire executive team should go to jail.