GARRETT MOTION INC. 
Item 1.01 Entry into a Material Definitive Agreement.
Exit Financing Credit Agreement
In connection with the Plan, on the Effective Date, the Company entered into a
Credit Agreement, by and among the Company, Garrett LX I S.à r.l. (the "Lux
Borrower"),
• a seven-year senior secured first-lien U.S. dollar term loan facility in
an aggregate principal amount of $715 million (the "Dollar Facility");
• a seven-year senior secured first-lien Euro term loan facility in an
aggregate principal amount of €450 million (the "Euro Facility" and,
together with the Dollar Facility, the "Term Loan Facilities"); and
• a five-year senior secured first-lien revolving credit facility with
aggregate commitments of $300 million providing for multi-currency
revolving loans to Swiss Borrower (the "Revolving Facility" and, together
with the Term Loan Facilities, the "Credit Facilities").
Up to the equivalent of
The Borrowers borrowed an aggregate amount of
Use of Proceeds
The proceeds of the Term Loan Facilities were used on the Effective Date (i) for the payment of fees and expenses payable in connection with entry into the Credit Agreement, the effectiveness of the Plan, the refinancing of the Company's existing indebtedness and the preferred equity investments that were made on the Effective Date, (ii) to fund distributions in accordance with the Plan, (iii) to payoff the Company's existing indebtedness, including under its pre-petition credit agreement, notes indenture and debtor-in-possession credit agreement and (iv) for general corporate purposes. The Revolving Facility was undrawn on the Effective Date. Proceeds of the Revolving Facility are available to be used for working capital and other general corporate purposes, including acquisitions permitted under the Credit Agreement. Any letters of credit will be used for general corporate purposes.
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Guarantees
All obligations under the Credit Facilities are or will be unconditionally
guaranteed jointly and severally, by: (a) the
Item 1.02 Termination of a Material Definitive Agreement.
Equity Interests
In accordance with the Plan and Confirmation Order, on the Effective Date, all shares of the Company's Common Stock issued and outstanding immediately prior to the Effective Date (the "Existing Common Stock"), and any rights of any holder in respect thereof, were deemed cancelled, discharged and of no further force or effect. Holders of our Existing Common Stock who did not elect the Cash-Out Option (as defined in the Plan) were issued a number of shares of new Common Stock equal to the number of shares of Existing Common Stock held by them as of the record date for the Plan.
Prepetition Indebtedness
Pursuant to the Plan, on the Effective Date, the obligations of the Debtors
under each of the following debt instruments were cancelled and the applicable
agreements governing such obligations were terminated: (a) that certain Credit
Agreement, dated as of
DIP Facility
On the Effective Date, that certain Senior Secured Super-Priority
Debtor-in-Possession Credit Agreement, dated as of
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Honeywell Agreements
Pursuant to the Plan, on the Effective Date, the obligations of the Debtors
under each of the following agreements were cancelled and the applicable
agreements governing such obligations were terminated: (a) that certain
Indemnification Guarantee Agreement, dated
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information in Item 1.01 under the heading "Exit Financing Credit Agreement" is incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of
Issuance of Common Stock
Upon the effectiveness of and pursuant to the Plan, all Existing Common Stock of the Company was cancelled and the Company issued 65,035,801 shares of Common Stock to holders of Existing Common Stock that did not exercise the Cash-Out Option. Each holder of Existing Common Stock that did not exercise the Cash-Out Option received a number of shares of new Common Stock equal to the number of shares of Existing Common Stock held by such holder in consideration for the cancellation of their shares of Existing Common Stock.
Issuance of Series A Preferred Stock
As previously reported, on
Issuance of Series B Preferred Stock
Pursuant to the Plan and the Plan Support Agreement, on the Effective Date the Company issued 834,800,000 shares of Series B Preferred Stock to Honeywell International Inc. ("Honeywell") in satisfaction of its claims arising from the Honeywell Agreements.
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Information regarding the Common Stock, Series A Preferred Stock, and Series B Preferred Stock is set forth in Item 5.03 of this Current Report on Form 8-K and is incorporated herein by reference.
The shares of Common Stock, Series A Preferred Stock, and Series B Preferred Stock issued pursuant to the Plan were issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), provided by section 1145 of the Bankruptcy Code or, only to the extent such exemption under section 1145 of the Bankruptcy Code is not available, section 4(a)(2) of the Securities Act.
Item 3.03 Material Modification to Rights of Security Holders.
The information in Item 1.01, 1.02, 3.02 and 5.03 is incorporated by reference into this Item 3.03.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Departure and Appointment of Directors
Pursuant to the Plan, on
Effective as of the Effective Date and pursuant to the Plan, the Company's board of directors will consistent of nine directorships. Olivier Rabiller, the Company's chief executive officer, will continue to serve as a director as of the Effective Date. Pursuant to the Plan, the following eight members will be appointed the Company's board of directors (collectively with Mr. Rabiller, the "New Board"):
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D'aun Norman
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On the Effective Date, pursuant to the terms of the Plan and the Confirmation
Order, the Company filed (i) its Second Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation"), (ii) the Certificate of
Designations for the Series A Preferred Stock (the "Series A Certificate of
Designations") and the Certificate of Designations for the Series B Preferred
Stock (the "Series B Certificate of Designations") with the Secretary of State
of the
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Pursuant to the Certificate of Incorporation, the Company's authorized capital
stock consists of 2,200,000,000 shares of capital stock, consisting of (i)
1,000,000,000 shares of common stock, par value
Common Stock
Holders of shares of the Common Stock are entitled to receive dividends when, as and if declared by the Board of Directors (the "Board") at its discretion out of funds legally available for that purpose, subject to the preferential rights of any preferred stock that may be outstanding. The timing, declaration, amount and payment of future dividends will depend on the Company's financial condition, earnings, capital requirements and debt service obligations, as well as legal requirements, regulatory constraints, industry practice and other factors that the Board deems relevant. Under the terms of our Series A Preferred Stock and Series B Preferred Stock, a dividend on our Common Stock (other than a dividend payable solely in Common Stock) may not be declared if (i) all cumulative accrued and unpaid preference dividends on all outstanding shares of Series A Preferred Stock has not been paid in full and the full dividend thereon due has not been paid or declared and set aside for payment, (ii) all prior redemption requirements with respect to Series A Preferred Stock have not been complied with, or (iii) the Company has not satisfied or cannot satisfy in full redemption payments owed to holders of Series B Preferred Stock.
Additionally, the Credit Agreement includes restrictions on the Company's ability to make dividends or distributions on, or redeem or otherwise acquire, its outstanding equity interests, including its Common Stock, Series A Preferred Stock and Series B Preferred Stock, in each case subject to certain exceptions and carve-outs.
The holders of the Common Stock are entitled to one vote for each share held of record on all matters on which stockholders generally are entitled to vote. Except as otherwise required by law, holders of Common Stock are not entitled to vote on any amendment to the Certificate of Incorporation (including any Certificate of Designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon.
Subject to the rights of any outstanding series of preferred stock, directors will be elected by a majority of the votes cast, provided that, in contested elections, directors will be elected by a plurality of the validly cast votes represented in person or by proxy with respect to the election. There are no cumulative voting rights for the election of directors.
Subject to the preferential liquidation rights of any preferred stock that may be outstanding, including the Series A Preferred Stock and the Series B Preferred Stock, upon the Company's liquidation, dissolution or winding-up, the holders of the Common Stock are entitled to share ratably in the Company's assets legally available for distribution to stockholders. . . .
Item 8.01 Other Events.
On
The following risk factors supplement the "Risk Factors" in Part I, Item 1A of
the Company's Annual Report on Form 10-K for the year ended
Unless the context otherwise requires, references in the following risk factors to "we," "our," and "us" refer to the Company and its subsidiaries. Capitalized terms used but not otherwise defined in the following risk factors have the meanings given in this Current Report on Form 8-K.
Risks Related to Our Emergence from Bankruptcy
We recently emerged from bankruptcy, which could adversely affect our business and relationships.
It is possible that our having filed for bankruptcy and our recent emergence from the Chapter 11 Cases could adversely affect our business and relationships with vendors, suppliers, service providers, customers, employees and other third parties. Due to uncertainties, many risks exist, including the following:
• key suppliers could terminate their relationship or require financial
assurances or enhanced performance;
• the ability to renew existing contracts and compete for new business
may be adversely affected;
• the ability to attract, motivate and/or retain key executives and
employees may be adversely affected;
• employees may be distracted from performance of their duties or more
easily attracted to other employment opportunities; and
• competitors may take business away from us, and our ability to attract
and retain customers may be negatively impacted.
The occurrence of one or more of these events could have a material and adverse effect on our results of operations, financial condition, business and reputation. We cannot assure you that having been subject to bankruptcy protection and the Chapter 11 Cases will not adversely affect our future results of operations, financial condition and business.
Our actual financial results after emergence from bankruptcy protection may not be comparable to our historical financial information.
We emerged from bankruptcy protection under Chapter 11 of the Bankruptcy Code on
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Our actual financial results may vary significantly from the projections that
were filed with the
In connection with our disclosure statement relating to the Plan (the
"Disclosure Statement"), and the hearing to consider confirmation of the Plan,
we prepared projected financial information to demonstrate to the
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description 2.1 Order of theBankruptcy Court , datedApril 26, 2021 , confirming the Chapter 11 Plan of Reorganization of the Debtors (incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K, filed onApril 27, 2021 ). 3.1 Second Amended and Restated Certificate of Incorporation ofGarrett Motion Inc. 3.2 Certificate of Designations for the Series A Preferred Stock ofGarrett Motion Inc. 3.3 Certificate of Designations for the Series B Preferred Stock ofGarrett Motion Inc. 3.4 Second Amended and Restated Bylaws ofGarrett Motion Inc. 10.1 Credit Agreement, dated as ofApril 30, 2021 , by and amongGarrett Motion Inc. , Garrett LX I S.à r.l.,Garrett Motion Holdings, Inc. and Garrett Motion Sàrl, the lenders and issuing banks party thereto andJPMorgan Chase Bank, N.A ., as administrative agent. 10.2 Series A Investor Rights Agreement, dated as ofApril 30, 2021 , amongGarrett Motion Inc. and the investors named therein. 10.3 Registration Rights Agreement, dated as ofApril 30, 2021 , amongGarrett Motion Inc. and the holders party thereto. 10.4 Form of Side Letter between the Company and the employees who hold awards under the Company's 2018 Stock Incentive Plan 99.1 Press Release datedApril 30, 2021 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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