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EXIDE TECH NEW Message Board

  • newsflashed2u newsflashed2u Jun 20, 2013 7:53 AM Flag

    Will they file Bankruptcy????

    I think so. No point is shorting this POS. Setting up for BK protection. Do your own DD.

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    • Fleas draining the blood out of XIDE. Eventually they'll go into a Coma(Chapter 11)

    • They did that before. Said they were worth 950 million. Judge wouldn't let them do it, as it was determined they were worth slightly over 1 billion. That;s only 50 million difference and it held them open.
      they're position has changed now, and us operations is poor, but international operations can flourish? its all the same company, i didn't buy us operations stock.
      and they have more than $50 million excess in there somewhere to be able to run international.

      • 1 Reply to pucer
      • Actually, the judge ruled they were worth $1.5bn in the last ch 11 in 2004. The big difference is that net debt was well over $2bn when they filed, which obviously is more than the value of the company so the bondholders and unsecured creditors ended up with the entire company.

        At the current equity value of $15mm, the market is basically assuming no recovery for the equity holders despite there being over $800mm of net assets as per the company's estimate (which could be low balled again).

        In my view, it's better for the CH 11 process to drag on as long as possible (unless a bid comes in for the company, which could happen now that Vernon is on its way to being resolved). Why?

        1. Gives more time for Vernon to reopen and get back to full operations. This should raise the asset value of the business.
        2. Allows the restructuring firm more time to fix the supply chain problems of the company and to find a better management team to run the business.
        3. Allows more time for lower lead prices to filter through the P&L, which should result in better margins.
        4. Europe should get better, particularly in the second half of the year.
        5. Get the Frisco proceeds, which will help the cash balance.
        6. Cost savings from Bristol will flow through the P&L in FY 2014, particularly in the second half.

        In short, the more time this drags on, the higher the likelihood that EBITDA improves from the depressed levels in FY 2013. This should raise the valuation of the business.

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