Business
Garrett Motion Accelerates and Expands Series B Preferred Stock Redemptions
Actions expected to result in more than $400 million in further de-leveraging and improved financial flexibility ROLLE, Switzerland, Dec. 17, 2021 (GLOBE
About this update from Garrett Motion Inc.
[{"type":"text","content":"Actions expected to result in more than $400 million in further de-leveraging and improved financial flexibility\nROLLE, Switzerland, Dec. 17, 2021 (GLOBE NEWSWIRE) -- Garrett Motion Inc. (Nasdaq: GTX, GTXAP), a leading, differentiated technology provider for the automotive industry, today announced it has taken further steps to improve its financial flexibility by accelerating and expanding Series B preferred stock redemptions, which Garrett anticipates will result in $411 million in debt reduction by the end of Q1 2022. “Our strong financial performance driven by demand across Garrett’s portfolio of products and services has generated solid cash flow, enabling us to normalize our capital structure, deleverage the balance sheet and return capital to shareholders,” said Olivier Rabiller, Garrett President and Chief Executive Officer. “Today’s debt reduction actions, combined with our recently announced $100 million share repurchase program, highlight the continued progress that Garrett has made in positioning the company for success as we pursue our strategic growth initiatives in the evolving powertrain industry.” On October 1, 2021 Garrett announced that it had amended the Certificate of Designations for the Series B preferred stock to provide for a partial redemption of Series B preferred stock in Q1 2022, which would result in a cash payment of $213 million. That first partial Series B preferred stock redemption has now been accelerated to December 28, 2021 and the corresponding cash payment slightly reduced to $211 million due to less accretion. In addition, Garrett plans to partially redeem additional shares of Series B preferred stock in Q1 2022 for a corresponding cash payment of $200 million. The second partial redemption is conditioned upon Garrett’s board of directors having determined that Garrett otherwise has sufficient liquidity to effect the redemption. Garrett issued the Series B preferred stock upon completion of its financial restructuring on April 30, 2021 and an affiliate of Honeywell International Inc. is the only holder of the Series B preferred stock. The present value of Series B preferred stock reflects a 7.25% discount rate on the remaining scheduled payments, was approximately $585 million on June 30, 2021 and is expected to be approximately $400 million as of December 31, 2021 following the first par...