Garrett Motion accelerates series B preferred stock redemptions

Chicago, Dec. 17 – Garrett Motion Inc. announced that it is accelerating a previously announced redemption of its series B preferred stock, of which an affiliate of Honeywell International Inc. is the only owner, according to a press release.

The company had announced it would partially redeem the shares in an amount of $213 million before the end of the first quarter of 2022.

However, the company is going to push the redemption up to Dec. 28 and slightly reduce the amount of the redemption to $211 million due to less accretion.

Additionally, Garrett now plans to further redeem an additional $200 million of the series B shares.

The timing for the newly announced redemption is expected in the first quarter of 2022, subject to the determination of Garrett’s board of directors that there is sufficient liquidity for the redemption.

As a reminder, the preferred stock was issued upon completion of Garrett’s restructuring on April 30, 2021.

The present value reflects a 7.25% discount rate on the remaining scheduled payments.

The remaining scheduled payments were approximately $585 million on June 30 with a reduction to $400 million as of Dec. 31 after the first partial redemption. And, then the amount is expected to be reduced further to around $207 million as of March 31, 2022 after the completion of both partial redemptions.

Rolle, Switzerland-based Garrett Motion is a provider of passenger vehicle, commercial vehicle, aftermarket replacement and performance enhancement solutions.

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