Exide Technologies

Exide Technologies Inc., XIDE -16.38% the car- and machine-battery maker, is preparing for a potential bankruptcy-protection filing by this summer, said people familiar with the matter.

The Milton, Ga., company, which faces a September debt payment, will likely seek Chapter 11 protection for the second time in a decade in a move known in restructuring circles as a "Chapter 22," these people said.

Any Chapter 11 filing isn't expected to include the company's European operations, a person familiar with the situation said. These operations account for more than half of the company's revenues.

The company, which makes and recycles lead-acid batteries for vehicles and other machines, has suffered from declining profitability due in part, it has said, to steep restructuring expenses, weaker-than-expected demand in some markets and higher lead-input costs.

It also has contended with scrutiny at a California battery-recycling facility, where operations are currently suspended pending the outcome of a public hearing amid allegations the company's storm-water system violated state regulations. The company has said it is "evaluating its legal and regulatory remedies."

Exide, which employs about 10,000 people with operations in more than 80 countries, carries roughly $700 million in debt. Creditors and analysts are concerned that Exide, which says it supplies BMW AG, BMW.XE -1.84% Fiat SpA, F.MI -6.48% Nissan Motor Co. 7201.TO -2.55% and other manufacturers, won't be able to repay a roughly $56 million convertible note due in September, some of these people said.

Text zur Anzeige gekürzt. Gesamten Beitrag anzeigen »