Exide to raise $200 million for capital projects
Exide Technologies, the US-based lead battery manufacturer, distributor and recycler, on May 12 announced it was raising $200 million in funding for capital projects. This, said the company, was in a bid to “once again become a pre-eminent global battery supplier for transportation and industrial applications”.
The money would also go towards expanding its capacity to meet growing demand for transportation batteries in the Americas’ aftermarket segment, the firm said.
Vic Koelsch, Exide’s chief executive, would not give further details of the proposed projects or the nature of the financial transactions to BESB, saying the company’s recent press releases “communicate everything we wish to communicate at this time”.
The capital raised may well come from a three-part refinancing of existing debt and raising new debt through a purchase and support agreement — effectively an exchange that also raises capital — which the firm announced on May 10.
A later statement said: “Exide… has entered into a series of financing transactions that will generate more than $200 million of new capital that are intended to be used to support Exide’s growth, including several capital projects.”
In April Exide won a three-year contract worth around $47 million to supply 6TAGM military batteries to the US Defense Logistics Agency. The company mentioned “the associated investments we are making to support it”.
The firm is also committed to an expansion plan costing around $12 million in its Fort Smith manufacturing plant — with the US government providing some $19 million — to produce submarine battery systems. The expansion should be completed by 2021.
The firm said additional projects would aim to accelerate efforts to improve manufacturing efficiencies in the US and Europe.
Koelsch was appointed president and CEO in June 2015, following a restructuring plan accepted by investors as it moved out of Chapter 11 bankruptcy.
“We are excited about the opportunity to initiate new investments to meet renewed demand for our products and to continue on our path of dramatically improved operational efficiencies,” said Koelsch.
“The consummation of these offerings demonstrates the strong support of our investors and speaks to the great strides the company is making to once again become a preeminent global battery supplier for transportation and industrial applications.”