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8-K - 8-K - EXIDE TECHNOLOGIES | d796950d8k.htm |
EX-99.2 - EX-99.2 - EXIDE TECHNOLOGIES | d796950dex992.htm |
Exide Technologies
Public-Side DIP Lender Presentation
September 30, 2014
Exhibit 99.1 |
2
Disclaimer
This
presentation
may
contain
certain
statements
that
may
be
deemed
forward-looking
statements
as
defined
in
the
U.S.
Private
Securities
Litigation
Reform
Act
of
1995. All statements that address activities, events or developments that we
intend, expect, plan, project, believe or anticipate will or may occur in the future are
forward-looking statements. By their nature, forward-looking
statements involve risks and uncertainties because they relate to events and depend on circumstances
that may or may not occur in the future. The Company undertakes
no obligation to update or revise any forward-looking statements.
Examples of forward-looking statements include, but are not limited to (a)
projections of revenues, cost of raw materials, income or loss, earnings or loss per share,
capital expenditures, growth prospects, dividends, the effect of
currency translations, capital structure, and other financial items, (b)
statements of plans and objectives of the Company or its management or Board
of Directors, including the introduction of new products, or estimates or predictions of actions by customers,
suppliers,
competitors
or
regulating
authorities,
(c)
statements
of
future
economic
performance,
(d)
statements
regarding
liquidity
and
(e)
statements
of
assumptions,
such
as
the
prevailing
weather
conditions
in
the
Companys
market
areas,
underlying
other
statements
and
statements
about
the
Company
or
its
business,
and
(f)
statements regarding tax and liquidity impacts from asset sales and restructuring
activities. Factors that could cause actual results to differ materially from
these forward looking statements include, but are not limited to, the following general factors such as:
(i) the ability of the Company to develop, prosecute, confirm and consummate the
Chapter 11 plan of reorganization, (ii) the potential adverse impact of the Chapter
11 filing on the Company's liquidity and operations and the risks associated with
operating businesses under Chapter 11 protection, (iii) the ability of the Company to
comply with the terms of the DIP financing facility, (iv) the Company's ability to
obtain additional financing, (v) the Company's ability to retain key management and
employees, (vi) customer response to the Chapter 11 filing, (vii) the risk factors
or uncertainties listed from time to time in the Company's filings with the Securities
and Exchange Commission (including, without limitation, those risk factors
described in the Companys fiscal 2014 Form 10-K for the fiscal year ended March 31,
2014) and with the U.S. Bankruptcy Court in connection with the Company's Chapter
11 filing, (viii) the fact that lead, a major constituent in most of the Companys
products, experiences significant fluctuations in market price and is a hazardous
material that may give rise to costly environmental and safety claims, (ix) the
Companys ability to implement and fund business strategies based on current
liquidity, (x) the Companys ability to realize anticipated efficiencies and avoid
additional unanticipated costs related to its restructuring activities, (xi) the
cyclical nature of the industries in which the Company operates and the impact of current
adverse economic conditions on those industries, (xii) unseasonable weather (warm
winters and cool summers) which adversely affects demand for automotive and
some industrial batteries, (xiii) the Companys substantial debt and debt
service requirements which may restrict the Companys operational and financial flexibility, as
well
as
imposing
significant
interest
and
financing
costs,
(xiv)
the
litigation
proceedings
to
which
the
Company
is
subject,
the
results
of
which
could
have
a
material
adverse effect on the Company and its business, (xv) the realization of the tax
benefits of the Companys net operating loss carry forwards, which is dependent upon
future
taxable
income,
(xvi)
competitiveness
of
the
battery
markets
in
the
Americas
and
Europe,
(xvii)
risks
involved
in
foreign
operations
such
as
disruption
of
markets, changes in import and export laws, currency restrictions, currency
exchange rate fluctuations and possible terrorist attacks against U.S. interests, (xviii) the
ability
to
acquire
goods
and
services
and/or
fulfill
later
needs
at
budgeted
costs,
(xix)
general
economic
conditions,
(xx)
the
Companys
ability
to
successfully
pass
along increased material costs to its customers, (xxi) recently adopted U.S. lead
emissions standards and the implementation of such standards by applicable states,
and (xxii) the Companys ability to resume operations at its Vernon,
California recycling facility. |
3
I.
Chapter 11 Process Update
II.
DIP Amendment Request
III.
Q&A
Agenda |
4
Introduction
Exide Technologies (Exide
or the Company) appreciates the opportunity to meet with public-side
DIP lenders to provide an update on its Chapter 11 process and discuss the DIP
amendment request Since the July DIP lender call, certain developments have
materialized that delayed the Companys plan of reorganization
(POR) process
Inventory overstatement at Canon Hollow
Increased financial demands from California regulators related to the Vernon, CA
facility permit process and remediation activities Recently announced DOJ/EPA
inquiry in connection with Vernon The Company has made progress to resolve
these issues but is unlikely to satisfy the Plan Support Agreement (PSA)
condition for DIP maturity extension by October 12
Conversations with regulators and POR negotiations with the Unofficial Committee of
Senior Secured Noteholders (UNC) continue Exide is hopeful that
it will reach agreement in the near-term on a POR term sheet supported by the UNC
The Company will also begin to explore other strategic alternatives as outlined by
the amendment Provides assurance of clear exit paths for the Chapter 11
case Given the current situation, the Company is requesting certain amendments
to its DIP facilities to provide for the time and flexibility necessary to
pursue restructuring strategies to maximize value |
5
Dual-Track Timeline
Set forth below is the timeline and key dates associated with the Companys
contemplated dual-track restructuring strategy POR negotiations and
sale process
preparation/launch
January 15, 2015
Court approval of stalking horse bid procedures
November 17, 2014
Sign PSA or begin sale
process/distribute
marketing materials
January 15, 2015
Court approval of
Disclosure Statement
March 10, 2015
Confirmation of
an acceptable
POR
March 31, 2015
Plan effectiveness
March 10, 2015
Court approval
of sale
March 31, 2015
Sale consummation
December 23, 2014
Signed stalking horse
agreement
September 24, 2014
DIP lender meeting |
6
I.
Chapter 11 Process Update
II.
DIP Amendment Request
III.
Q&A
Agenda |
7
Maturity Date
March 31, 2015 (5¹/2
month extension)
(1)
Financial
Covenants
Remove minimum EBITDA covenant
Minimum liquidity covenant: $50 million ($15 million increase)
Minimum US liquidity covenant: $25 million (new provision)
US liquidity defined as US cash plus excess availability
Maximum capital expenditures based on schedule below with no
carry-over (new provision):
Negative
Covenants
Permitted asset sale basket of $25 million removed with exception for Nox credit
sale process recently approved by the Court Tighten permitted debt
baskets Milestones
Signed PSA or initiation of sale process
11/17/2014
If POR process pursued:
Disclosure Statement approval
1/15/2015
Confirmation
3/10/2015
If sale process pursued:
Signed stalking horse agreement
12/23/2014
Stalking horse agreement/bid procedures
approved
1/15/2015
Sale approved
3/10/2015
Other
ABL Lenders extend with the following proposed modifications:
Revolver commitment reduced to $200 million ($25 million reduction)
Ability to exercise remedies at the direction of Required Revolver Lenders
(instead of Required Lenders) in effect under certain circumstances if POR
not delivered in accordance with adjusted milestones
Cash anti-hoarding provision
Refreshed field exam and inventory appraisal update by 9/30
Termination of the delivered stalking horse agreement shall
be an event of default
Pricing:
Amendment Fee
75 bps
Timing
Signature pages due by 5 p.m. New York time on Friday, October 3
Level
$35 million
$12.5 million
Quarter-ending 12/31/2014
Each month thereafter
Period
DIP Amendment Request
(1)
Initial
maturity
extension
through
November
4,
2014,
with
full
maturity
extension
conditioned
on
court
approval
of
the
pricing
components
of
the
amendment,
which
will
be
retroactively
effective upon court approval.
(2) Payable on full commitment amount at 12/31/14.
Drawn
Undrawn
Duration Fee
(2)
Existing
L+325 bps
50 bps
N/A
Post amendment
L+400 bps
100 bps
N/A
After 12/31/14
L+450 bps
150 bps
50 bps
rd |
8
Closing Remarks
Well-defined process in place with clear path to consummation of Chapter 11
case Continued support of DIP lenders is critical to positive outcome
More time and flexibility needed to bridge to POR or organized sale process
Would avoid significant risk to all stakeholders in unmanaged scenario
|
9
I.
Chapter 11 Process Update
II.
DIP Amendment Request
III.
Q&A
Agenda |