Exide continues to power up; other names seen quiet

By Paul Deckelman and Sara Rosenberg

New York, Jan. 12 - Exide Technologies Inc.'s bonds were quoted sharply higher Monday, continuing a recent run that began when a bankruptcy court judge rejected the company's reorganization plan and directed it to talk to its bondholders to come up with a more realistic valuation that would give those creditors greater recovery.

Little other action was seen Monday among either the bonds or the bank debt of bankrupt and distressed companies.

A trader said that Exide's 10% notes "continued to run," quoting them at 26 bid, well up from offered levels at around 21 at which they had ended trading last week. A week-and-a-half ago, he said, the bonds were seen at a wide 15 bid, 21 offered level, so "they're really moving."

On Monday, the Princeton, N.J. -based maker of auto batteries and other energy storage systems, said that it had secured "a large order" for motive power batteries and a complete battery maintenance system from Scandinavian Airlines Systems, the consortium of three national airlines for Norway, Sweden, and Denmark that offers a broad range of airline services.

Exide said that SAS had recently recently acquired 68 tractors that it will use to as baggage carriers at the airport in Copenhagen, Denmark, the major airport in Scandinavia, and that each unit would be fitted with 80-volt Exide batteries and supported by a complete Exide battery water maintenance system to maximize tractor fleet utilization.

Exide did not publicly put a dollar figure on the value of the contract.

It was a piece of good news for a company mired deep in bankruptcy, which got a setback in late December when Judge Kevin Carey of the U.S. Bankruptcy Court in Wilmington, Del. refused to confirm the company's plan of reorganization, instead declaring that Exide has a higher enterprise value than that proposed in the plan and, therefore, greater value should be available for distribution to the unsecured creditors.

That boosted the bonds, which had been languishing in the single-digits, as high as the lower 20s in the first few trading sessions of the year, before they fell back slightly into the mid-teens.

The plan rejected by the judge had put the company's enterprise value at $950 million to $1.05 billion, but the judge said the company's value was somewhere in a range of $1.4 billion to $1.6 billion, more in line with the estimates by the company's creditors of $1..48 billion to $1.71 billion.

Following the ruling, Exide said that will seek to renew negotiations with its creditors on revising the terms of its plan. The parties are supposed to report back to the judge on the status of such negotiations or before Jan. 22.

Elsewhere, "it was a really boring, quiet day," a trader at a distressed-debt shop lamented.

"Things were seen up a point, down a point, but it was all just adjustments [to previous levels] with no trading."

Weirton moves little on coke problem

The trader said that Weirton Steel "moved a little, but no great shakes," with its subordinated 11 3/8% notes and 10¾% notes offered in the upper teens, while its senior 10% notes remained stuck in the 50s.

The bankrupt Weirton, W.Va.-based integrated steelmaker said that it would have to shut down some operations and furlough some personnel due to a shortage of coke, which is used as a fuel in the iron-making process.

It said that the number of affected employees has yet to be determined.

The situation might even cause the company to temporarily idle one of its two blast furnaces.

Weirton said it might have more information about the effects of the coke shortage on its production around the middle of the month.

The world-wide coke shortage - which has recently been intensified by the increased demand for the coal-based material by steelmakers in China and elsewhere - got especially tight following a recent fire at a coke plant run by U.S. Steel, Weirton's main coke supplier.

One other distressed name of note is British broadband operator Telewest plc; a trader said its 11% notes were at 67 bid and its 11 3/8% notes at 51 bid, both a point better.

He saw such distressed U.S. communication names as WorldCom Inc. unchanged around 36.5 bid, 36.75 offered, and saw no movement in Adelphia Communications Corp.'s notes, recently seen in the lower 90s.

Parmalat Finanziaria SpA's bonds were being quoted around 22 bid, 24 offered, "up a little," he said, "but not much."

Another trader said that was "not much different" than the crippled Italian dairy producer's bonds ended at last week.

This trader saw Adelphia's bonds "around 92-94, and that should cover most of it."

Overall, he said, things in distressed land Monday were "sort of blah. It is what it is."

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