Exide Technologies today announced that customary first day motions to help facilitate continued operations while the company operates in Chapter 11 were approved by Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware.
As part of the court’s approval of first day motions, Exide received authorization from the court to, without interruption:
- Pay employees in the usual manner and to continue their health and welfare benefits programs;
- Continue to manufacture and deliver product to customers; and
- Pay suppliers for goods and services provided to the company post-petition.
The court also approved on an interim basis the $40 million in Debtor-in-Possession (DIP) financing from a group of lenders, including certain of its existing noteholders. This DIP financing will provide sufficient liquidity to support ongoing operations in North America for the duration of the sale process and restructuring.
The court will hold hearings on June 18, 2020,to consider the final orders regarding Exide’s first day motions, including the final approval of the DIP financing.
“The Court’s approval of these critical first day motions is an important first step, allowing us to continue supplying high-quality energy storage solutions to our customers and honor our commitments to our stakeholders while pursuing a value-maximizing sale of our North America, EMEA, and Asia-Pacific operations,” said Exide Chairman, President and CEO Tim Vargo.
As announced on May 19, the company and certain of its U.S. subsidiaries have filed voluntary petitions for relief in the U.S. Bankruptcy Court for the District of Delaware, as one component of a comprehensive strategy to best position its North America, EMEA, and Asia-Pacific businesses. The company’s operations outside of North America are not included in the Chapter 11 proceedings as a debtor.