Battery maker Exide Technologies has collapsed, selling off its European and Asian businesses to creditors and entering Chapter 11 in the US for protection from creditors.
The 130 year old company, which supplied batteries for the UK’s Nightingale hospital in London (above), has over 8,000 staff in 80 countries. The European business makes up around 60 per cent of the business with four transportation plants, five industrial plants, three recycling plants and two R&D facilities.
The European and Asia business are not part of the Chapter 11 application, which gives the US business ten days to restructure. "Today's actions are intended to position our businesses around the world for future growth and profitability while also providing the greatest benefit to our employees, customers, and other stakeholders," said Tim Vargo, Chairman, President, and Chief Executive Officer of Exide. "Given the continued, unsustainable impact on our cost structure resulting from legacy liabilities in North America, and in light of the global economic COVID-19 slowdown that has amplified these pressures, a sale of our North American operations through a court-supervised process provides the best opportunity to continue delivering high-quality energy storage solutions and service to our customers.”
The legacy liabilities come from issues with lead contamination at seven lead-acid battery manufacturing and recycling plants in the US over the last twenty years after Exide bought Gould-National Battery from Gould Electronics.
Bids for Exide's European and Asian businesses are set to be decided in early July. "We have been steadily growing revenue and market share in EMEA and Asia-Pacific over the past few years," said Vargo. “The EMEA and Asia-Pacific business entered the current crisis in good financial health, and we have acted prudently throughout and, in some cases, have drawn on the support mechanisms made available by governments to mitigate the impact of the crisis and associated lockdown. The additional funding provided as part of this agreement will ensure that this business will emerge from the current crisis even stronger."