BRISTOL, Tenn. - Exide Technologies announced Monday it has filed a petition seeking Chapter 11 bankruptcy protection.
Exide, which has been downsizing its battery manufacturing operation in Bristol, said only its U.S. operations are affected by the federal court filing to reorganize its business.
According to an Exide quarterly report issued last February, closing the Bristol manufacturing operation is part of a strategic initiative to have other manufacturing locations running near capacity.
The quarterly report also noted Exide recorded $5.2 million in restructuring charges “related to the closure of the Bristol, Tennessee flooded battery manufacturing facility.”
According to the federal government, Exide was awarded $34.2 million in federal stimulus funds in December 2009 to make advanced batteries in Columbus, Ga., and at its Bristol location.
In its bankruptcy filing, Exide said it has negotiated a $500 million debtor-in-possession financing facility to be provided by a group of financial institutions and investors with a goal of continuing its restructuring.
“Our company has been burdened by a highly leveraged balance sheet which has limited our ability to competitively invest in our businesses,” Exide President and Chief Executive Officer James R. Bolch said in a prepared release. “Recently, our profitability has been impacted by unprecedented increases in our product costs — driven primarily by the market price of scrap lead in North America – as well as operational challenges in the U.S. and Europe which we have been unable to fully offset. After a great deal of consideration, we concluded a restructuring of our balance sheet and our operations was the best path forward for the company.”
Exide’s board of directors also appointed Robert M. Caruso as chief restructuring officer.
Exide, based in Milton, Ga., notified the state of Tennessee last October it would cut nearly 170 workers in Bristol.
A spokesman with the Tennessee Department of Labor and Workforce Development said final layoffs at the Bristol facility will occur by August 2013. More than 800 workers staffed the facility at its peak.
The company’s stock was trading below 20 cents per share at midday Monday.