Business
Garrett Motion Amends Terms of Series B Preferred Stock
Reducing leverage by repayment of $213 million Series B; Improving flexibility by deferring Series B put option until December 31, 2022 ROLLE, Switzerland,
About this update from Garrett Motion Inc.
[{"type":"text","content":"Reducing leverage by repayment of $213 million Series B; Improving flexibility by deferring Series B put option until December 31, 2022\nROLLE, Switzerland, Sept. 30, 2021 (GLOBE NEWSWIRE) -- Garrett Motion Inc. (Nasdaq: GTX), a leading, differentiated technology provider for the automotive industry, today announced it has amended and restated the Certificate of Designations of the Series B Preferred Stock (the “Series B”) that results in de-leveraging and improved balance sheet flexibility. Upon completion of its financial restructuring on April 30, 2021, Garrett issued the Series B to an affiliate of Honeywell International Inc. (“Honeywell”). The present value of the Series B reflects a 7.25% discount rate on the remaining scheduled payments. The present value on the Series B was $585 million on June 30, 2021 and will be approximately $613 million as of January 1, 2022. Honeywell remains the only holder of the Series B shares. Series B holders currently have the right to require Garrett to repurchase all of the Series B shares if Garrett’s consolidated trailing 12-month adjusted EBITDA exceeds $600 million for two consecutive fiscal quarters. Under the terms of the amendment, the Series B holders have agreed to defer their right to require Garrett to repurchase all of the Series B shares until December 31, 2022. In connection with the amendment, Garrett will partially redeem the Series B shares prior to the end of the first quarter of 2022, resulting in a cash payment of approximately $213 million as of January 1, 2022. Following this payment, the present value of the remaining scheduled redemption payments on the Series B shares will be approximately $400 million. All other material terms and conditions of the Series B remain unchanged, including the scheduled redemption payment by Garrett of $34.8 million due April 30, 2022. “This important de-leveraging event is a first step in working towards normalizing and improving Garrett’s capital structure post emergence as we continue to focus on the transformation of the global powertrain landscape,” said Olivier Rabiller, Garrett President and Chief Executive Officer. “Postponing the Series B put option until the end of 2022, at the earliest, provides us with additional flexibility to optimize our capital deployment strategy. We remain focused on utilizing our financial position ...