Valence Technology Files Voluntary Chapter 11 Business Reorganization
Valence Technology, Inc. announced that it filed a voluntary petition for a chapter 11 business reorganization in the U.S. Bankruptcy Court for the Western District of Texas.
The business reorganization is intended to bolster the Company’s liquidity in the U.S. and abroad and enable the Company to focus on its core lithium phosphate markets. Valence is currently negotiating a debtor-in-possession credit facility and expects to announce the facility shortly. Once in place, this facility will be used to enhance liquidity and working capital and will be subject to Court approval and other conditions. With a credit facility, the Company believes that it will have sufficient liquidity to operate its business during chapter 11, and to continue the flow of goods and services to its customers in the ordinary course.
The Company expects to pay employee wages and benefits and continue customer programs. Subsidiaries outside of the U.S. are not subject to the bankruptcy proceedings and are expected to continue to operate in the ordinary course of business. Valence plans to honor all post-petition obligations to suppliers in the ordinary course.
"After careful consideration of the implications of chapter 11 and weighing them against a lack of attractive alternatives, the Board of Directors and the senior management team believe that this is a necessary step and the right thing to do for the future of Valence," said Robert L. Kanode, Valence’s president and chief executive officer. "Our goal is to continue to operate and meet customer requirements as we work through the chapter 11 process as quickly as possible. We are fully committed to working with our valued customers."
Valence expects to complete its restructuring during 2012.
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