UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of
1934
Garrett
Motion Inc.
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(Name of Issuer)
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Common Stock, par
value $0.001 per share
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(Title of Class of Securities)
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366505
105
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(CUSIP Number)
|
|
Andrew Rabinowitz
Marathon Asset Management, L.P.
One Bryant Park, 38th Floor
New York, New York 10036
212.500.3000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
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December 10, 2020
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(Date of Event Which Requires Filing of this Statement)
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If the filing person has previously filed
a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule
because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ]
Note: Schedules filed in paper format
shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom
copies are to be sent.
* The remainder of this cover page shall be
filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for
any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder
of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of
1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions
of the Act (however, see the Notes).
1
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Names of Reporting Persons.
Marathon Asset Management, L.P.
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2
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Check the Appropriate Box if a Member of a Group (See Instructions)
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(a) [ ]
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(b) [X]
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3
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SEC Use Only
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4
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Source of Funds (See Instructions):
AF
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5
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Check if disclosure of legal proceedings
is required pursuant to Items 2(d) or 2(e):
[ ]
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6
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Citizenship or Place of Organization.
Delaware
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Number
of Shares
Beneficially
Owned by
Each
Reporting
Person With
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7 Sole Voting Power 2,526,000
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8 Shared Voting Power 0
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9 Sole Dispositive Power
2,526,000
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10 Shared
Dispositive Power 0
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11
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Aggregate Amount Beneficially Owned
by Each Reporting Person
2,526,000
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|
12
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Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ]
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13
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Percent of Class Represented by
Amount in Row (11)
3.3%
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14
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Type of Reporting Person (See Instructions)
IA
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|
|
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SCHEDULE 13D
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Item 1.
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Security and Issuer
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This statement on
Schedule 13D relates to the shares of common stock, par value $0.001 per share (“Common Stock” or “Shares”),
of Garrett Motion Inc., a Delaware corporation (the “Issuer”). The principal executive office of the Issuer
is located at La Pièce 16, Rolle, Switzerland, 1180.
Item 2. Identity and Background
(a),(f) This statement
is filed by Marathon Asset Management, L.P. (“Marathon”), a Delaware limited partnership, which serves as the
investment manager to certain funds and accounts (the “Funds and Accounts”) which hold certain securities of
the Issuer as described herein. Marathon, in its capacity as the investment manager of each of the Funds and Accounts,
has the sole power to vote and the sole power to direct the disposition of all securities of the Issuer held by the Funds and Accounts. The
general partner of Marathon is Marathon Asset Management GP, LLC, a Delaware limited liability company (the “General Partner”). Bruce
Richards and Louis Hanover are the managing members of the General Partner. Messrs. Richards and Hanover are citizens
of the United States. This statement shall not be deemed to be an admission that Marathon, the General Partner, Messrs. Richards
or Hanover, the Funds and Accounts or any other person is the beneficial owner of the securities reported herein for purposes of
Section 13 of the Exchange Act, or for any other purpose.
(b) Marathon maintains
its principal office at One Bryant Park, 38th Floor, New York, New York 10036.
(c) Marathon, on
behalf of certain funds and accounts that it manages, is engaged in the investment in personal property of all kinds, including,
but not limited to, capital stock, depository receipts, investment companies, mutual funds, subscriptions, warrants, bonds, notes,
debentures, options and other securities of whatever kind and nature.
(d)-(e) During the
last five years, none of Marathon, the General Partner, Mr. Richards or Mr. Hanover has (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) been party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
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Item 3.
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Source and Amount of Funds or Other Consideration
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As of the filing
date hereof and as more fully set forth in Item 5 below, Marathon may be deemed to beneficially own 2,526,000 Shares. The
funds used to purchase the Shares reported herein came directly from the assets of the Funds and Accounts. The aggregate
amount of funds used to purchase the Shares reported herein was approximately $10,189,293.
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Item 4.
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Purpose of Transaction
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On
September 20, 2020, the Issuer 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
Court”). On December 10, 2020, in accordance with section 363 of title 11 of the Bankruptcy Code and the
Court’s Order (A) Authorizing and Approving Bid Procedures, (B) Authorizing and Approving The Stalking Horse Bid
Protections, (C) Scheduling a Sale Hearing, (D) Approving Notice Procedures, and (E) Granting Other Relief [Case No.
20-12212, ECF No. 282] and the bidding procedures annexed thereto, counsel to Marathon and the Funds and Accounts, Warlander
Asset Management, L.P., Jefferies LLC, Bardin Hill Opportunistic Credit Master Fund LP, Owl Creek Asset Management, L.P, and
Cetus Capital VI, L.P. (collectively, the “Investors”) submitted a letter (the “Bid
Letter”) detailing the terms of a proposal for the going concern financial restructuring of the Debtors on the
terms and subject to the conditions outlined in that letter (the “Proposed Transaction”). The Proposed
Transaction, which is outlined in the Bid Letter and the attached term sheet (such term sheet referred to herein as the
“Term Sheet”), remains subject to the negotiation and execution of definitive documentation, an order by
the Bankruptcy Court, and other conditions.
The Proposed Transaction
would provide for the reorganization of the Debtors and the recapitalization of the Issuer (as reorganized, “New GMI”),
and would be funded by the incurrence and issuance respectively of:
·
$1.2 billion of new debt financing, currently proposed to be provided by Jefferies Finance LLC, an affiliate of Jefferies
LLC, to New GMI; and
·
$735 million of a new class of Series A Preferred Stock of New GMI.
The capital stock
of New GMI would consist only of (i) reinstated shares of Common Stock, (ii) $735 million of Series A Preferred Stock consisting
of (A) $700 million of Series A Preferred Stock issued to holders (as may be limited pursuant to applicable securities laws and
regulations) of existing shares of Common Stock pursuant to a rights offering, in exchange for cash compensation, which rights
offering would be fully backstopped by the Investors, and (B) $35 million of Series A Preferred Stock issued as a commitment fee
to the Investors, as consideration for the backstop obligations, and (iii) if applicable, Common Stock or issued shares of a new
class of Series B Preferred Stock to be issued to holders of Honeywell Spin-Off Claims (as defined in the Term Sheet) pursuant
to the terms set forth in the Term Sheet. Each holder of a Honeywell Spin-Off Claim would receive, at the option of the Debtors
in consultation with the Investors: (a) Series B Preferred Stock; (b) cash; (c) shares of Common Stock of New GMI (subject to the
terms of the Term Sheet); or (d) such other treatment permitted under the Bankruptcy Code (subject in the case of either clause
(b) or clause (d) above to the consent of those Investors holding at least 75% percent in aggregate amount of the Backstop Commitments
(as defined in the Term Sheet) of all Investors).
Under the Proposed
Transaction, the Board of Directors of New GMI would consist of the Chief Executive Officer, three independent directors nominated
by New GMI, three independent directors, one each nominated by Owl Creek Asset Management, L.P., Warlander Asset Management, L.P.
and Jefferies LLC, one independent director with relevant industry experience nominated by the committee of equity holders and
approved by New GMI and those Investors holding at least 70% percent in aggregate amount of the Backstop Commitments (as defined
in the Term Sheet) of all Investors (the “Requisite Backstop Parties”), and one director nominated by the Issuer
and approved by the Requisite Backstop Parties. Other terms for the governance of New GMI are detailed in Exhibit D to the Bid
Letter, and other operational restrictions on New GMI—are detailed in that exhibit.
The terms of the
Proposed Transaction are subject to the terms and conditions included therein, as well as negotiation with, and approval by, the
Issuer, and by approval and Confirmation Order of the Bankruptcy Court and approval of appropriate regulatory authorities. The
obligations of the Investors to consummate the Proposed Transaction will terminate if the closing of the Proposed Transaction
does not occur on or prior to May 10, 2021. The termination date may be extended, at the sole option and discretion of the Issuer,
if material regulatory approvals have not been received, up to and including June 10, 2021, and it may be further extended upon
the agreement of the Investors and the Issuer. In all circumstances and at any time after the parties enter into a Backstop Commitment
Agreement (as defined in the Term Sheet or the Backstop Commitment Agreement), if the Set-Up Value (as defined in the Term Sheet
or Backstop Commitment Agreement) is less than $835 million, the Investors shall have the right to terminate the Backstop Commitment
Agreement and the Proposed Transaction.
The foregoing description
is qualified in its entirety by reference to the Bid Letter and the attached Term Sheet, a copy of which is attached hereto as
Exhibit 1 and incorporated herein by reference.
Depending
upon Marathon’s view of the Issuer’s business and financial prospects and general market conditions, Marathon may cause
the Funds and Accounts to purchase additional Shares or dispose of Shares at any time or from time to time. Marathon intends to
review their investment in the Issuer on a continuing basis and, subject to obligations under the bankruptcy proceedings and under
any agreements that it enters into in connection with the Proposed Transaction, and depending upon the price of and other market
conditions relating to the Common Stock, developments affecting the Issuer and the Chapter 11 case and other factors deemed relevant,
Marathon may increase or decrease the size of their investment in the Issuer, pursue changes in the composition of the Issuer’s
Board of Directors or propose or 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. Marathon reserves the right, to act independently and without
respect to the other Investors, to change their plans or proposals at any time, and to take any action as they deem appropriate,
either alone or with others, in their sole discretion at any time, including with respect to any matter set forth in items (a)
through (j) of Item 4 of Schedule 13D.
|
Item 5.
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Interest in Securities of the Issuer
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(a) As of the filing
date hereof, Marathon may be deemed to beneficially own 2,526,000 Shares. The percentage used in this Schedule 13D is
calculated based upon 75,788,279 shares of Common Stock outstanding as of October 26, 2020, as reported in the Issuer’s Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2020, filed with the Securities and Exchange Commission on November
2, 2020.
(b) See rows (7)
through (10) of the cover pages to this Schedule 13D for the number of shares of Common Stock as to which Marathon has the sole
or shared power to vote or direct the vote and sole or shared power to dispose or to direct the disposition.
Based upon information
provided to Marathon by the other Investors, the Investors collectively beneficially own 4,871,864 shares of Common Stock, which
represents approximately 6.4% of the Issuer’s outstanding shares of Common Stock, and 362,593 shares held by Jefferies LLC,
1,100,000 shares held by funds and accounts managed by Owl Creek Asset Management, L.P., 777,351 shares held by funds and accounts
managed by Warlander Asset Management, L.P., 105,920 shares held by Cetus Capital VI, L.P. and funds affiliated with Cetus Capital
VI, L.P., and 2,526,000 shares held by funds and accounts managed by Marathon.
This statement
shall not be deemed to be an admission that Marathon, the General Partner, Messrs. Richards or Hanover, the Funds and Accounts
or any other person is the beneficial owner of the securities reported herein for purposes of Section 13 of the Exchange Act,
or for any other purpose or that they are members of a “group”. Marathon expressly disclaims the existence of, or
membership in a “group” within the meaning of Section 13(d)(3) of the Act and Rule 13d-5(b) thereunder with any of
the other Investors, as well as beneficial ownership with respect to any shares of common stock beneficially owned by the other
Investors, and neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission by Marathon
that it is the beneficial owner of any of the shares of common stock referred to herein for purposes of Section 13(d) of the Act,
or for any other purpose.
(c) The following
table details the transactions during the sixty days on or prior to December 10, 2020 and from December 10, 2020 through the filing
date of this Schedule 13D in Shares, or securities convertible into, exercisable for or exchangeable for Shares, by Marathon or
any other person or entity controlled by Marathon or any person or entity for which Marathon possesses voting or investment control
over the securities thereof (each of which was effected in an ordinary brokerage transaction).
Date
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Type of Transaction
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Number of Shares
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Security Type
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Price per Share
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10/23/2020
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Open market purchase
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209,100.00
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Common Stock
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$3.1657(1)
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10/26/2020
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Open market purchase
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200,000.00
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Common Stock
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$3.4724(2)
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10/27/2020
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Open market purchase
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63,669.00
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Common Stock
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$3.5591(3)
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10/28/2020
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Open market purchase
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107,600.00
|
Common Stock
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$3.5964(4)
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10/29/2020
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Open market purchase
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419,631.00
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Common Stock
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$3.7484(5)
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11/9/2020
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Open market purchase
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250,000.00
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Common Stock
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$4.22(6)
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11/10/2020
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Open market purchase
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11,169.00
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Common Stock
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$4.15(7)
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11/13/2020
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Open market purchase
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365,000.00
|
Common Stock
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$4.2093(8)
|
11/16/2020
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Open market purchase
|
100,000.00
|
Common Stock
|
$4.3075(9)
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11/17/2020
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Open market purchase
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273,831.00
|
Common Stock
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$4.3972(10)
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11/18/2020
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Open market purchase
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250,000.00
|
Common Stock
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$4.2947(11)
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11/19/2020
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Open market purchase
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150,000.00
|
Common Stock
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$4.2844(12)
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11/23/2020
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Open market purchase
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1,000.00
|
Common Stock
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$4.3(13)
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12/7/2020
|
Open market purchase
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25,000.00
|
Common Stock
|
$4.4517(14)
|
12/8/2020
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Open market purchase
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100,000.00
|
Common Stock
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$4.6605(15)
|
Explanation of
responses:
The purchase prices reported in Item
5(c) are weighted average prices. The Reporting Persons undertake to provide to the staff of the SEC, upon request, full information
regarding the number of shares sold at each separate price within the range set forth in the footnotes below.
1. These
shares were purchased in multiple transactions at prices ranging from $2.65 to $3.33, inclusive.
2. These
shares were purchased in multiple transactions at prices ranging from $3.30 to $3.54, inclusive.
3. These
shares were purchased in multiple transactions at prices ranging from $3.23 to $3.70, inclusive.
4. These
shares were purchased in multiple transactions at prices ranging from $3.50 to $3.75, inclusive.
5. These
shares were purchased in multiple transactions at prices ranging from $3.59 to $4.09, inclusive.
6. These
shares were purchased in multiple transactions at prices ranging from $4.06 to $4.44, inclusive
7. These
shares were purchased in multiple transactions at prices ranging from $4.15 to $4.24, inclusive.
8. These
shares were purchased in multiple transactions at prices ranging from $4.13 to $4.30, inclusive.
9. These
shares were purchased in multiple transactions at prices ranging from $4.20 to $4.37, inclusive.
10. These
shares were purchased in multiple transactions at prices ranging from $4.22 to $4.52, inclusive.
11. These
shares were purchased in multiple transactions at prices ranging from $4.24 to $4.35, inclusive.
12. These
shares were purchased in multiple transactions at prices ranging from $4.21 to $4.31, inclusive.
13. These
shares were purchased in multiple transactions at prices ranging from $4.21 to $4.90, inclusive.
14. These
shares were purchased in multiple transactions at prices ranging from $4.43 to $4.55, inclusive.
15. These
shares were purchased in multiple transactions at prices ranging from $4.47 to $4.82, inclusive.
Except as otherwise
reported herein, there were no transactions effected in the Shares, or securities convertible into, exercisable for or exchangeable
for the Shares, by Marathon or any other person or entity controlled by Marathon or any person or entity for which Marathon possesses
voting or investment control over the securities thereof within the past sixty days.
(d) No person other
than Marathon is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the
sale of, such shares of Common Stock.
(e) Not applicable
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Item 6.
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Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.
|
The information included
in Item 4 above is incorporated by reference into this Item 6.
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Item 7.
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Material to Be Filed as Exhibits
|
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Exhibit 1
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Bid Letter submitted by Marathon Asset Management L.P., Warlander Asset Management, L.P.,
Jefferies LLC, Bardin Hill Opportunistic Credit Master Fund LP, Owl Creek Asset Management, L.P., and Cetus Capital VI, L.P.,
dated as of December 10, 2020 (filed herewith).
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SIGNATURE
After reasonable
inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete
and correct.
Date: December 21, 2020
MARATHON ASSET MANAGEMENT,
L.P.
By: Marathon Asset Management
GP, LLC, its general partner
By: /s/ Andrew Rabinowitz
Name: Andrew Rabinowitz
Title: Authorized Person
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