Exide Technologies Announces Refinancing Transaction
Entry into Purchase and Support Agreement with Key Investors
Issuance of New Second Lien Notes
Commencement of Offer to Exchange Outstanding First Lien Notes for New First Lien Notes with Extended Maturity and Related Consent Solicitation
Expected Issuance for Cash of Additional New First Lien Notes
MILTON, Ga., May 10, 2017 – Exide Technologies, a global provider of stored electrical energy solutions (the “Company”), today announced that it has entered into a Purchase and Support Agreement (the “PSA”) with investors and certain holders of its outstanding 11% First Lien Senior Secured Notes due 2020 (the “Existing First Lien Notes”), 7% Second Lien Senior Secured Convertible PIK Notes due 2025 (the “Existing Second Lien Notes”) and common stock, par value $0.01 (the “Common Stock”). Pursuant to the PSA, among other things, (i) certain investors have today purchased $80.0 million in aggregate principal amount of 7.25% Second Lien Senior Secured Convertible PIK Notes due 2025 (the “New Second Lien Notes”) for cash at a purchase price of 90% of such New Second Lien Notes, generating gross proceeds of $72 million; (ii) the Company has today commenced an Exchange Offer and Consent Solicitation (each as defined below) pursuant to which the Company is offering to exchange an equal principal amount of new 11% First Lien Senior Secured Notes due 2022 (the “New First Lien Notes”) in exchange for Existing First Lien Notes; and (iii) certain investors have agreed to purchase for cash, contemporaneous with or prior to the Early Settlement Date (as defined below) for the Exchange Offer and Consent Solicitation, $150.0 million in aggregate principal amount of New First Lien Notes and 4,050,000 shares of Common Stock for cash at an aggregate purchase price generating gross proceeds of $135 million.
The terms of the New Second Lien Notes are substantially similar to the terms of the Existing Second Lien Notes, other than as to the interest rate and that the conversion rate is set at 50% of the conversion rate applicable to the Existing Second Lien Notes. The terms of the New First Lien Notes will be substantially similar to the terms of the Existing First Lien Notes (prior to effecting the Proposed Amendments (as defined below)) except that the New First Lien Notes will mature on April 30, 2022.
The Company is offering to exchange (the “Exchange Offer”) any and all of the Existing First Lien Notes held by Eligible Holders (as defined herein) for up to an equal principal amount of New First Lien Notes, upon the terms and subject to the conditions set forth in the Company’s Confidential Offering Memorandum and Consent Solicitation Statement (the “Offering Memorandum”) and related Letter of Transmittal, each dated May 10, 2017. Concurrently with the Exchange Offer, the Company is soliciting consents (the “Consent Solicitation”) from Eligible Holders to proposed amendments (the “Proposed Amendments”) to the indenture governing the Existing First Lien Notes (and various other security and ancillary documents) that would, among other things, eliminate substantially all of the restrictive covenants and certain events of default under such indenture and provide that the collateral will cease to secure the Existing First Lien Notes.
Pursuant to the PSA, certain key investors holding approximately 68% of the aggregate principal amount of Existing First Lien Notes have agreed to tender their Existing First Lien Notes in the Exchange Offer and give their consents in the Consent Solicitation. As a result, it is expected that both the Exchange Offer and the Consent Solicitation will be consummated.
The Exchange Offer and Consent Solicitation will expire at 11:59 p.m., New York City time, on June 7, 2017 (such date and time, the “Expiration Time”), unless extended or earlier terminated by the Company. In order to be eligible to receive the total exchange amount (the “Total Exchange Consideration”), including the early tender premium (the “Early Tender Premium”), Eligible Holders must tender their Existing First Lien Notes at or prior to 5:00 p.m., New York City time, on May 23, 2017 (such date and time, the “Early Tender Deadline”).
It is expected that Eligible Holders tendering Existing First Lien Notes at or before the Early Tender Deadline will receive the Total Exchange Consideration on the day following the Early Tender Deadline, which is expected to be on or about May 24, 2017 (such date, the “Early Settlement Date”). For Existing First Lien Notes that are validly tendered after the Early Tender Deadline but at or before the Expiration Time (and not validly withdrawn) and accepted for exchange by the Company, Eligible Holders will receive only the exchange consideration (the “Exchange Consideration”), which is equal to the Total Exchange Consideration less the Early Tender Premium. Such tendering Eligible Holders will receive the Exchange Consideration promptly after the Expiration Time, which is expected to be on or about June 8, 2017 (the “Settlement Date”). Holders whose Existing First Lien Notes are accepted for tender at the Early Settlement Date or the Settlement Date will be entitled to accrued interest on such Existing First Lien Notes, in each case, in the manner set forth in the Offering Memorandum.
The Exchange Offer and Consent Solicitation is subject to the satisfaction or waiver of certain conditions set forth in the Offering Memorandum, including the tender of Existing First Lien Notes representing at least 66-2/3% of the principal amount of the Existing First Lien Notes outstanding at or prior to the Expiration Time and the closing, contemporaneous with or prior to the Early Settlement Date, of the issuance for cash New First Lien Notes and Common Stock pursuant to the PSA. The Company may, at its option and its sole discretion, terminate, amend or extend the Exchange Offer and Consent Solicitation.
The Exchange Offer and Consent Solicitation is being made only to, and the Offering Memorandum and other documents relating to the Exchange Offer and Consent Solicitation will only be distributed to, holders who complete and return an eligibility letter (which can be accessed at www.dfking.com/extc) confirming that they are an Eligible Holder. An Eligible Holder is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), an institutional accredited investor within the meaning of Rule 501(a)(1), (a)(2), (a)(3) or (a)(7) of the Securities Act or a person that is not a “U.S. person” within the meaning of Regulation S under the Securities Act. The Exchange Offer and Consent Solicitation is not being made to holders of Existing First Lien Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.
The New First Lien Notes to be offered have not been registered under the Securities Act or any state securities laws, and unless so registered, may not be offered or sold in the United States or to U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of any of these securities, in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Full details of the terms and conditions of the Exchange Offer and Consent Solicitation are described in the Offering Memorandum and related Letter of Transmittal. Requests for additional copies of the Offering Memorandum or the Letter of Transmittal should be directed to D.F. King & Co., Inc. at the following telephone numbers: (866) 828-6934 or (212) 269-5550 (banks and brokers).
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on current beliefs and expectations and involve certain assumptions or estimates that involve various risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Readers should not place undue reliance on any such forward-looking statements, which are made only as of the date hereof. Exide Technologies has no duty, and assumes no obligation, to update forward-looking statements as a result of new information, future events or changes in the Company's expectations.
About Exide Technologies
Exide Technologies is a global provider of stored electrical energy solutions—batteries and associated equipment and services for transportation and industrial markets. With 128 years of industry experience and operating in more than 80 countries, Exide produces and recycles a broad range of products that keep customers and their businesses powering forward.
The Exide Transportation business manufactures and markets starting, deep-cycle, and micro-hybrid batteries for automotive, light and heavy-duty truck, agricultural, marine, military, powersport, and other specialty applications, along with battery diagnostic equipment and charging systems.
Exide serves the Industrial Power markets with its GNB®-branded efficient energy storage systems for both Motive Power and Network Power customers. Motive Power applications include materials handling (power for lift trucks, airside assistance vehicles, and automatic guided vehicles); cleaning machines; railroads; military and mining vehicles; and other commercial electric vehicles. Network Power installations include standby power for electric utilities; telecommunications systems; alarm/security systems; renewable energy systems; railway systems; uninterruptible power supply (UPS); and defense industry equipment.
Exide Technologies is Powering the World Forward. History and scale, combined with a start-up mentality, make Exide the right choice for customers who want more than simply a battery supplier.
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