Exide Technologies, which makes batteries for industries that include marine, filed for Chapter 11 bankruptcy protection Monday in a Delaware federal court.
The company said it had $1.9 billion in assets and $1.1 billion in liabilities, court documents showed.
“In recent years a number of factors have contributed to a decline in Exide’s earnings and liquidity position, ultimately making this Chapter 11 filing a necessary step for Exide to de-lever its balance sheet,” the company said in court documents.
Those factors included rising production costs that cut into margins and the lingering downturn in Europe, which accounts for about 51.2 percent of the company’s revenue, court documents showed.
Intense competition in the battery industry led to Walmart signing an exclusive agreement with Johnson Controls, Exide’s major competitor, resulting in a $160 million annual hit to revenue.
The company said downgrades in credit limited its ability to receive new outside financing and invest in its business, primarily in the United States, “causing the company to be at a competitive disadvantage, relative to bigger, better-capitalized competitors,” court papers read.
“Exide suffered a significant setback, however, while considering its various out-of-court restructuring alternatives,” court documents read, after the California Department of Toxic Substances Control suspended the company’s Vernon, Calif., lead recycling operations, saying they weren’t compliant with health and emission standards.
The Vernon shutdown will directly affect Exide by eliminating an estimated $24 million from the bottom line of its six-month business plan.
Based in Milton, Ga., Exide operates 13 manufacturing facilities and employs about 3,600 people in the United States.
Exide’s stocks closed at 20 cents on Monday. It has a 52-week high of $3.77 and a 52-week low of 20 cents.
— Reagan Haynes