Court Approves Exide Bankruptcy Financing

A federal bankruptcy judge has given interim permission to Exide Technologies Inc., which filed for Chapter 11 on Monday, to borrow as much as $500 million to stay afloat while it reorganizes.

The company is initially allowed to tap as much as $395 million of the $500 million debtor-in-possession financing (DIP) loan from JPMorgan Chase & Co. Exide says it will pay off its existing $160 million revolving credit line and use additional funds to cover its daily operating expenses.

Some of the company's senior noteholders also may participate in the DIP financing, according to Exide. A hearing to consider final approval of the loan is scheduled for July 11.