C&D Technologies launches exchange offer, bankruptcy plan solicitation

By Caroline Salls

Pittsburgh, Oct. 21 - C&D Technologies, Inc. has launched an offer to exchange all of its outstanding 5.25% convertible senior notes due 2025 and 5.5% convertible senior notes due 2026 for up to 95% of the company's common stock as part of its restructuring plan, according to a company news release.

Specifically, noteholders will receive 3,961.252 shares of common stock for each $1,000 principal amount of notes tendered.

The completion of the exchange offer is subject to receiving tenders for at least 95% of the principal amount of the notes and common stockholder approval of the exchange offer and an amendment to C&D's certificate of incorporation to increase the number of shares of common stock.

If all of the notes are exchanged, participating noteholders will receive their share of 95% of the company's common stock immediately following completion of the exchange offer, and existing common stockholders will keep 5% of the stock.

According to the release, the exchange offer is an out-of-court method of restructuring the company's debt to address imminent debt repayment obligations and liquidity issues.

If the exchange offer is unsuccessful, the company said it would not be able to repay its current debt from cash on hand or other assets.

Plan solicitation

As a result, C&D is simultaneously soliciting noteholders and existing stockholders to approve a pre-packaged plan of reorganization as an alternative to the exchange offer.

If the restructuring is accomplished through the plan, 100% of the notes, plus all unpaid interest, will be canceled, and noteholders will receive their share of either 95% of the new common stock of the company if shareholder exchange consent is obtained or 97.5% of the new common stock, subject to dilution by any issuance made under shareholder warrants to purchase 5.0% of the common stock if the shareholder exchange consent is not obtained.

In addition, 100% of the existing common stock would be canceled, and common stockholders would receive their share of either 5% of the new common stock if they approve the exchange or 2.5% of the stock and shareholder warrants if it they do not approve.

All other creditor classes, excluding the noteholders, will be paid in full for their claims to the extent they have not been previously paid.

The company said it has entered into a restructuring support agreement with two entities that currently hold roughly 62% of the notes, under which the entities agreed to tender their notes in the exchange offer and vote to accept the pre-packaged plan.

Offer deadline

The exchange offer is scheduled to expire at 11:59 p.m. ET on the later of Nov. 18 and 10 business days following the effective date of the related registration statement.

C&D said it does not expect any interruption in its operations during the restructuring, regardless of whether it is completed under the exchange offer or the pre-packaged plan.

Epiq Bankruptcy Solutions, LLC (646 282-2400 or 866 734-9393) is the exchange agent and information agent for the exchange offer and the tabulation agent for the solicitation of the bankruptcy plan.

Macquarie Capital (USA) Inc. is acting as the dealer-manager for the exchange offer and the financial adviser to the company for the restructuring.

C&D Technologies is a Blue Bell, Pa.-based engineer, manufacturer and seller of reserve power systems for regulating and monitoring power flow and providing backup power.

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