For the second time in a decade, battery-maker Exide Technologies entered bankruptcy court Monday, seeking a court-supervised restructuring that will likely result in job cuts and smaller operations.
Milton-based Exide is one of the world’s largest makers and recyclers of batteries for autos and industrial use, with $3 billion in annual sales. But the company’s losses mounted and its stock plunged more than 90 percent this year as it struggled with higher lead prices, slow sales in Europe and stiff competition from rivals such as Johnson Controls.
The company was also staggered by recent plant closures or suspended operations at battery-recycling and lead smelting facilities in California, Texas and Pennsylvania, partly due to alleged pollution issues.
Exide said the voluntary Chapter 11 bankruptcy filing will give it protection from creditors while it deals with a heavy debt load and “underperforming” businesses.
In 2004, Exide emerged from an earlier bankruptcy restructuring and moved its headquarters from New Jersey to metro Atlanta.
Exide said the latest bankruptcy filing in the U.S. Bankruptcy Court in Wilmington, Del., covers only U.S. operations. Exide said it will continue operating and paying employees normally and does not “expect any material changes to (employees’) benefits.”
Exide has about 10,000 employees globally and 3,600 in the United States, including 277 at its Milton headquarters, 21 at a Decatur facility and 275 at a Columbus plant that the company expanded last year to make a new type of auto battery.
Under Chapter 11, with a bankruptcy judge’s approval, companies can suspend payments to certain creditors for months or years and renegotiate leases, labor agreements and other contracts as they seek to shed liabilities and re-emerge as a viable business.
Exide sought bankruptcy protection ahead of about $83 million in debt payments due later this summer.
But the company said it also negotiated a deal with JPMorgan Chase to provide $500 million in so-called “debtor in possession” loans that will help finance its operations while it retools in bankruptcy court.
One industry analyst expects Exide to slim down through sales of operations, job cuts or other moves.
“I think they can pull out of it,” said Jeff Osborne, managing director at Stifel Nicolaus & Co., but “it might be a smaller version of itself.”
But Exide might have a difficult time getting federal anti-trust regulators’ approval for a possible sale of its domestic operations to rivals, he said. Sales of units in Asia or Europe are more likely, he predicted. “It’s already such a consolidated market here,” he said.
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