Exide Technologies entered into a plan support agreement ("PSA") with holders of a majority of the principal amount of Exide's senior secured notes. The PSA includes a detailed term sheet which describes a plan of reorganization. Pursuant to the PSA, the Supporting Noteholders, who also hold a substantial majority of Exide's estimated $360 million DIP Credit Facility's term loan, have agreed to support the Plan which would deleverage the company by more than $600 million and allow Exide to emerge from Chapter 11 substantially in its current form – operating across all of its existing business segments.
Under the Plan, certain of the Supporting Noteholders have agreed to convert at least $100 million of their DIP facility claims into new second lien convertible debt and roll the balance of their DIP loans into a new exit term loan. The Plan also contemplates a new $175 million capital commitment to be raised in a rights offering made available to eligible holders of the Debtor's pre-petition 8.625 percent senior secured notes. There is substantial support among the Supporting Noteholders for entering into a backstop agreement for the new capital, and the Company continues to negotiate the terms of such an agreement with the hopes of finalizing it in the coming weeks.
In addition, Exide has initiated the sales process contemplated by the terms of Amendment No. 8 of its DIP facility, which the U.S. Bankruptcy Court approved on October 31, 2014, by soliciting potential interest from third parties for a sale of the Company's businesses. This dual-track process will allow Exide to ensure that it has explored opportunities to maximize estate value.
"The PSA is another significant, positive step forward in our restructuring process," said Robert M. Caruso, President and Chief Executive Officer of Exide Technologies.
The PSA and Term Sheet are conditioned upon the negotiation of, and agreement to, definitive documents (including a plan of reorganization, disclosure statement, backstop commitment agreement, and other related documents and agreements). Exide's goal is to emerge from the Chapter 11 restructuring of its U.S. operations by March 31, 2015.
The Company will file a Current Report on Form 8-K with the U.S. Securities and Exchange Commission that attaches definitive copies of the PSA and Term Sheet.
Exide Technologies, with operations in more than 80 countries, is one of the world's largest producers and recyclers of lead-acid batteries.