CUSIP No. 366505105
Page 8 of 10 Pages
Like virtually all automotive component manufacturers, the Company was adversely affected by COVID-19 and, like many companies in many businesses, needed covenant relief under its bank credit facilities due to the impact of COVID-19 on its business. In June 2020, the Company announced that it had obtained covenant relief from its lenders for a two-year period through June 30, 2022, which dovetailed with the deferral period under the Company’s asbestos liability indemnity agreement with Honeywell, which had been put in place prior to the Spin-off. However, unlike other automotive component manufacturers, on August 26, 2020, the Company announced that it was evaluating a balance sheet restructuring, citing a number of non-shareholder interests, and on September 20, 2020, the Company announced that it had commenced reorganization proceedings under Chapter 11 of the United States Bankruptcy Code. Based on filings made by the Company with the SEC, the Company also entered into a restructuring support agreement with certain of the Company’s lenders and a stalking horse purchase agreement with a private equity firm in connection with its Chapter 11 filing.
Sessa Capital has not determined at this time what actions, if any, it will take in connection with these circumstances, but currently expects among other things to explore alternatives to the stalking horse purchase agreement, the Company’s proposed debtor-in-possession financing and, ultimately, plan of reorganization. In connection therewith, Sessa Capital may engage in discussions with the Company and/or determine to agree to work in concert with other parties, including other shareholders. There can be no guarantee that any such transaction will materialize.
Sessa Capital intends to review its investment in the Company on a continuing basis and, depending upon the price of and other market conditions relating to the Shares, developments affecting the Company and the Chapter 11 case and other factors deemed relevant, may increase or decrease the size of its investment in the Company or pursue changes in the composition of the Company’s Board of Directors. In addition, Sessa Capital may take one or more other actions that relate to or would result in any matter referred in items (a) through (j) of Item 4 of Schedule 13D, alone or with others. Sessa Capital reserves the right to take such actions as it deems appropriate, in its discretion.
The foregoing is subject to change at any time, without notice, and there can be no assurance that Sessa Capital will take any of the actions set forth above.
| Item 5. | Interest in Securities of the Issuer |
| | (a) | As of the date of this statement, Sessa Capital directly owns 6,912,204 Shares, representing 9.1% of the 75,635,938 outstanding Shares, as reported in the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on July 30, 2020. Sessa Capital GP, Sessa IM, Sessa IM GP and Mr. Petry, by virtue of the relationships set forth under Item 2 of this statement, may be deemed to indirectly beneficially own the Shares directly owned by Sessa Capital. |
| | (b) | The Reporting Persons have sole voting power and sole investment power with respect to the Shares owned by Sessa Capital. |
| | (c) | During the past 60 days, none of the Reporting Persons has effected any transactions in the Shares, except that on August 27, 2020 Sessa Capital sold 170,774 Shares for tax planning purposes at prices ranging from $3.28 to $3.7975 per share. |
| | (d) | No person (other than the Reporting Persons) has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, Shares owned by Sessa Capital. |
