Item 1.02 Termination of a Material Definitive Agreement
As previously reported, on September 20, 2020 (the "Petition Date"), Garrett
Motion Inc. (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 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, prior to commencement of the
Chapter 11 Cases, certain of the Debtors had entered into a share and asset
purchase agreement (the "Stalking Horse Purchase Agreement"), with AMP
Intermediate B.V. and AMP U.S. Holdings, LLC, each affiliates of KPS Capital
Partners, LP (together with its affiliates, as applicable, "KPS"), pursuant to
which KPS had 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. and certain other assets and liabilities of the
Debtors pursuant to a plan of reorganization under the Bankruptcy Code.
As a result of the Company's entry into the Plan Support Agreement, dated
January 11, 2021, with Centerbridge Partners, L.P., Oaktree Capital Management,
L.P., and certain other investors and parties, on January 15, 2021, KPS
delivered to the Company written notice (the "Termination Notice") terminating
the Stalking Horse Purchase Agreement pursuant to the terms thereof, effective
immediately. Under the terms of the Stalking Horse Purchase Agreement, such
termination is subject to KPS's right to receive a termination payment equal to
$63 million and reimbursement of certain reasonable, documented, out-of-pocket
costs and expenses, including those incurred by KPS in connection with the
negotiation, drafting and execution of the Stalking Horse Purchase Agreement.
Cautionary Information Regarding Trading in the Company's Securities.
The Company's securityholders are cautioned that trading in the Company's
securities during the pendency of the Chapter 11 Cases is highly speculative and
poses substantial risks. Trading prices for the Company's securities may bear
little or no relationship to the actual recovery, if any, by holders thereof in
the Company's Chapter 11 Cases. Accordingly, the Company urges extreme caution
with respect to existing and future investments in its securities.
Forward-Looking Statements
This Current Report on Form 8-K and the exhibit hereto may contain
"forward-looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. All statements, other than statements of fact,
that address activities, events or developments that the Company or the
Company's management intend, expect, project, believe or anticipate will or may
occur in the future are forward-looking statements. Although the Company
believes forward-looking statements are based upon reasonable assumptions, such
statements involve known and unknown risks, uncertainties, and other factors,
which may cause the actual results or performance of the Company to be
materially different from any future results or performance expressed or implied
by such forward-looking statements. Such risks and uncertainties include, but
are not limited to those described in the Company's annual report on Form 10-K
for the year ended December 31, 2019, as updated by the Company's quarterly
report on Form 10-Q for the period ended September 30, 2020, as well as the
Company's other filings with the Securities and Exchange Commission, under the
headings "Risk Factors" and "Cautionary Note Regarding Forward-Looking
Statements." You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this document.
Forward-looking statements are not guarantees of future performance, and actual
results, developments and business decisions may differ from those envisaged by
the Company's forward-looking statements.
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