Exide Technologies announced it received a non-binding proposal for a plan of reorganization from the Unofficial Committee of Senior Secured Noteholders, whose members hold a substantial majority of the company’s DIP facility term loan and prepetition senior secured notes. The proposal follows extensive discussions among the company and certain members of the UNC who executed confidentiality agreements with Exide.
The company also received an amendment to the DIP facility providing for an extension of the June 30, 2014, deadline under the DIP facility to file a Chapter 11 POR. And Exide received an extension of the delivery date under the DIP facility to file audited financial statements for fiscal year 2014 from 90 days following fiscal year-end until August 15, 2014.
The non-binding POR proposal contemplates substantial deleveraging of the company’s debt by more than $700 million, a sizable investment of new equity capital; and new debt to fund the Exide Chapter 11 emergence and post-emergence business, including liquidity and working capital to support the company’s operations, seasonality and growth of the company’s businesses, capital improvements; and environmental, health and safety investments. The proposed new equity investment would comprise an issuance of approximately $300 million of preferred convertible equity (a portion of which is contemplated to be issued in connection with a Rights Offering backstopped by certain members of the UNC and the balance of which would be in the form of a direct equity purchase by such members).
The proposed new debt issuance is contemplated to be approximately $185 million and would be backstopped by certain members of the UNC. The non-binding proposal also contemplates a new ABL facility, the commitments for which would be obtained from third-party lenders in conjunction with the POR confirmation process. All of the transactions contemplated by the non-binding proposal would be subject to various conditions precedent, including filing of Exide’s audited financial statements and completion of the investigation referenced in Exide’s filing on Form 12b-25.
Exide Technologies is a global producer and recycler of lead-acid batteries.
Previously on abfjournal: JPMorgan Agents Exide DIP Credit Agreement, May 29, 2014