June 10 U.S. battery maker Exide Technologies
filed for Chapter 11 bankruptcy protection early on
Monday, court documents showed, with the aim of cutting debt and
implementing a restructuring plan to better compete in the
Exide, which makes lead-acid batteries, said in the court
filing that a combination of rising production costs, intense
competition and the economic downturn in Europe had led to
Also, higher spent-battery costs and lead-related price
increases have put pressure on the company's margins, Exide
said, adding that taking the Chapter 11 route would be the best
option to restructure its finances and operations.
"In recent years, competition in the battery industry has
intensified, especially in the auto parts retail and mass
merchandise channels where large customers are able to use their
buying power to negotiate lower prices and longer payment terms,
or move business elsewhere if their demands are not met," Exide
In 2010, Wal-Mart Stores Inc, one of Exide's then
major customers, chose Exide's principal rival Johnson Controls
Inc as its sole supplier of transportation batteries and
stopped carrying Exide's rival products.
Exide said Wal-Mart's switch resulted in a loss of about
$160 million in annual revenue.
"More significantly, in addition to the revenue lost from
Wal-Mart sales, Exide also lost an important and reliable source
of battery cores under a captive-core arrangement with
Wal-Mart," the company added.
Operations in Europe, which is experiencing a prolonged
economic downturn, accounted for about 51.2 percent of the
company's worldwide revenue.
Exide estimated its liabilities at $1.14 billion and assets
at more than $1.89 billion, according to the court filing.
The company said the Chapter 11 filing applies to the U.S.
parent only and its international operations are excluded.
It has also secured $500 million in debtor-in-possession
(DIP) financing and expects to pay U.S. employees as usual and
does not expect any material changes to their benefits.
The case is Exide Technologies, Case No. 13-11482, U.S.
Bankruptcy Court, District of Delaware.