Battery supplier Exide Technologies Inc. and three of its U.S. subsidiaries on Monday filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Delaware. DaimlerChrysler AG is the supplier's largest automaker customer.
The three subsidiaries included in the filing are Exide Delaware LLC, Exide Illinois Inc. and Royal Battery Distributors LLC.
Exide decided to file for Chapter 11 because of its high debt levels, largely caused by integration costs associated with a series of acquisitions. The largest of those was the September 2000 acquisition of battery maker GNB.
Tough economic conditions also were to blame, the company said in a statement.
The filing is expected to help Exide continue to operate its businesses while restructuring its balance sheet and gaining access to new working capital.
The 19 plants involved in the filing will continue to operate and suppliers that provide goods and services to those operations after the filing will be paid. Other suppliers will go through the claims process, said Joel Weiden, company spokesman.
Exide's ability to pay the salaries of employees who work for those operations is contingent on court approval, which the company expects to receive on Tuesday, Weiden said.
Exide has arranged for $415 million in new financing. That includes $250 million in debtor-in-possession financing from Citicorp USA Inc., a subsidiary of Citibank N.A. and other financial groups.
The Delaware court must approve this financing. A hearing is planned for Tuesday.
Weiden would not project when Exide expects to emerge from Chapter 11.