Exide Industries JV partner gets debt restructuring lift

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From pv magazine international.

The European battery manufacturer which is planning to open a module and battery pack assembly line in Gujarat early next year, has had help with a proposed debt restructure from the Swiss Takeover Board.

The Swiss authority yesterday announced it had agreed to exempt Leclanché’s major shareholder from a requirement to take over all of the historic company’s stock.

The 109-year-old battery maker in June announced the establishment of a joint venture with Exide Industries, India’s largest battery manufacturer. The JV – 75% owned by Exide – plans to build the module assembly line and also announced a lithium-ion cell production plant would be established in Gujarat by mid 2020.

Leclanché’s chief shareholder, FEFAM, would typically be obliged to complete a full takeover of the Yverdon-les-Bains-based company under the Swiss Takeover Board’s rules, because of the scale of the debt it is owed by the company that it wishes to convert into equity, as part of Leclanché’s bid to reduce its debt pile.

Luxembourg-registered shareholders

But the takeover board announced yesterday FEFAM – an investment fund made of Luxembourg-registered sub funds AM Investment SCA, SICAV-SIF and two further sub funds of the Finexis Equity Fund, devoted to energy and e-money strategies – would be granted an exemption from the takeover requirement ahead of a Leclanché shareholder vote on the proposed restructuring, to be held at an EGM in a week’s time.

In the meantime, FEFAM has had to provide significant backing for the venerable brand, reportedly following a CHF75 million (Rs532 crore) injection with a CHF24 million debt for equity swap. It was reported in October that the chief shareholder would provide a further $76.7 million (Rs541.5 crore) cash boost plus $50 million for M&A activity. October was also when plans for the latest, $55 million debt for equity swap were announced, with the aim of concluding the restructuring by the first quarter of next year.

Although earlier reports cited a plan to reduce Leclanché’s debts by 75% under the restructuring, yesterday’s announcement by the Swiss Takeover Board included a figure of 65%.