| Item 7.01 | Regulation FD Disclosure. |
As previously disclosed, on September 20, 2020 (the “Petition Date”), the Company and certain of its subsidiaries (collectively, the “Debtors”) each filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors’ chapter 11 cases (the “Chapter 11 Cases”) are being jointly administered under the caption “In re Garrett Motion Inc., 20-12212.”
Also as previously disclosed, on the Petition Date, certain of the Debtors (the “Sellers”) also entered into a share and asset purchase agreement (the “Stalking Horse Purchase Agreement”) with AMP Intermediate B.V. (the “Stalking Horse Bidder”) and AMP U.S. Holdings, LLC, each affiliates of KPS Capital Partners, LP, pursuant to which the Stalking Horse Bidder has agreed to purchase, subject to the terms and conditions contained therein, all of the equity interests in each of Garrett LX I S.à r.l., and Garrett Transportation I Inc. (subject to an election by the Stalking Horse Bidder to purchase substantially all of the assets of Garrett Transportation I Inc., instead of its equity), along with certain other assets and liabilities of the Debtors (the “Acquired Assets”) pursuant to a plan of reorganization under the Bankruptcy Code. The acquisition of the Acquired Assets pursuant to the Stalking Horse Purchase Agreement is subject to approval of the Bankruptcy Court and an auction to solicit higher or otherwise better bids pursuant to a bidding procedures order to be entered by the Bankruptcy Court (the “Bidding Procedures Order”). Under the Bidding Procedures Order, the Stalking Horse Purchase Agreement serves as the minimum or floor bid on which the Debtors, their creditors, suppliers, vendors, and other bidders may rely.
On October 19, 2020, the Company issued a press release, (i) disclosing that it had received a proposal from the Stalking Horse Bidder to revise the terms of the Stalking Horse Purchase Agreement following approval of the Bidding Procedures Order by the Bankruptcy Court (the “Stalking Horse Bidder Revised Proposal”) and (ii) referencing the public announcement that Honeywell International Inc., Centerbridge Partners, L.P. and Oaktree Management L.P. (collectively, the “Bidding Group”) had entered into a coordination agreement in anticipation of submitting to the Company an alternative proposal for a plan of reorganization (the “Alternative Proposal”) (the “Press Release”). The Press Release is furnished herewith as Exhibit 99.1, which is incorporated herein by reference.
The Alternative Proposal was delivered to the Company on October 16, 2020, and was publicly disclosed in (i) Amendment No. 1 to the Schedule 13D filed by Oaktree Capital Management, L.P. and certain of its affiliates (“Oaktree”) on October 16, 2020 (the “Oaktree Amended 13D”) and (ii) Amendment No. 1 to the Schedule 13D filed by Centerbridge Credit Partners Master, L.P. and certain of its affiliates on October 16, 2020. The proposed terms of the Alternative Proposal are described in the coordination agreement, previously filed by Oaktree as Exhibit II to the Oaktree Amended 13D, which is incorporated by reference and furnished herewith as Exhibit 99.2. In connection with the Alternative Proposal, the Company received a letter from the Bidding Group’s attorneys on October 16, 2020, a copy of which is furnished herewith as Exhibit 99.3 and incorporated herein by reference (the “Bidding Group Letter”). The Company responded to the Bidding Group Letter through its attorneys by letter on October 19, 2020 (the “Garrett Letter”). A copy of the Garrett Letter is furnished herewith as Exhibit 99.4 and incorporated herein by reference.
The Stalking Horse Bidder Revised Proposal was delivered to the Company on October 19, 2020. The proposed terms of the Stalking Horse Bidder Revised Proposal are described in the letter of intent of the same date furnished herewith as Exhibit 99.5, which is incorporated herein by reference. The Stalking Horse Bidder Revised Proposal is subject to Bankruptcy Court approval of the Debtors’ proposed Bidding Procedures Order. The Stalking Horse Purchase Agreement would remain subject to higher or better offers in the Chapter 11 Cases. Closing of the transaction is subject to customary regulatory approvals, as well as Bankruptcy Court approval and other customary conditions. Following Bankruptcy Court approval of the Debtors’ proposed Bidding Procedures Order, the Company expects to discuss with the Stalking Horse Bidder amendments to the Stalking Horse Purchase Agreement and other transaction documentation to reflect the terms of the revised bid.
The information furnished pursuant to this Item 7.01, including Exhibits 99.1, 99.2, 99.4 and 99.5, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.
