Tuesday March 26, 6:04 pm Eastern Time
LPC-Exide loans dive on imminent default, not so imminent DIP
(UPDATE: This story is provided by Loan Pricing Corp.)
NEW YORK, March 26 (LPC) - Bids for Exide Technologies Inc. (NYSE:EX - news)' bank debt evaporated, sources say, in the wake of Monday's emergency lenders call that addressed the company's need to waive two approaching payments to senior lenders: a $3.5 million principal payment due March 31 and a $5.4 million interest payment due April 3.
Exide's razor-thin liquidity will not allow the company to make the relatively small payments, and it appears at this time that the Princeton, N.J.-based battery maker, unable to secure a waiver, is in payment default on the upcoming obligations, sources add.
Furthermore, Exide held another bank call this morning to address, among other things, its proposed DIP financing, which has been a sticking point for lenders.
In general, Exide's restructuring efforts ``have not been going as smoothly or orderly as we had hoped over the past couple of months,'' notes one of the company's institutional investors.
Additional roadblocks that lie ahead on Exide's wrinkled roadmap to bankruptcy are the covenant waiver on Exide's credit, which expires on April 12, and a bond payment due April 15.
Prior to this week's lenders calls, Exide's bank debt was bid in the mid- to upper 60s, but its loans now are offered in the 65 area with no bid in sight, according to market sources.
In September 2000, Credit Suisse First Boston amended and restated Exide's existing credit to include a $464 million TLB - $250 million of which represented an add-on - priced at LIB+450 and maturing in March 2005, as well as an $86 million TLA and a $250 million revolver (both running 3.4 years and priced at LIB+375).
A string of acquisitions positioned Exide as a leading producer of automotive batteries and industrial batteries in North America and Europe, but has left the company highly leveraged.
Industry pressures, restructuring costs and legal issues have pressured Exide's operating results and cash generation for the past several years, resulting in weak cash flow protection.
Exide's customers include aftermarket retailers Kmart and NAPA and automakers DaimlerChrysler and Volkswagen.
More than 50% of Exide's battery sales are in Europe, where its brands include Classic, Maxxima and Ultra. Sales for 2001 were reported at $2.43 billion.
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