- Accession Number:
- Form Type:
- 13D Filing
- Publication Date:
- 2020-12-21 15:51:25
Please notice the below summary table is generated without human intervention and may contain errors. Please refer to the complete filing displayed below for exact figures.
|Name||Sole Voting Power||Shared Voting Power||Sole Dispositive Power||Shared Dispositive Power||Aggregate Amount Owned Power||Percent of Class|
|Marathon Asset Management||2,526,000||0||2,526,000||0||2,526,000||3.3%|
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Under the Securities Exchange Act of 1934
|Garrett Motion Inc.|
|(Name of Issuer)|
|Common Stock, par value $0.001 per share|
|(Title of Class of Securities)|
Marathon Asset Management, L.P.
One Bryant Park, 38th Floor
New York, New York 10036
|(Name, Address and Telephone Number of Person |
Authorized to Receive Notices and Communications)
|December 10, 2020|
|(Date of Event Which Requires Filing of this Statement)|
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).
Names of Reporting Persons.
Marathon Asset Management, L.P.
|2||Check the Appropriate Box if a Member of a Group (See Instructions)|
|(a) [ ]|
|3||SEC Use Only|
Source of Funds (See Instructions):
Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e):
Citizenship or Place of Organization. Delaware
7 Sole Voting Power 2,526,000
8 Shared Voting Power 0
9 Sole Dispositive Power 2,526,000
10 Shared Dispositive Power 0
Aggregate Amount Beneficially Owned by Each Reporting Person
|12||Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ]|
Percent of Class Represented by Amount in Row (11)
Type of Reporting Person (See Instructions)
|Item 1.||Security and Issuer|
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.
|Item 3.||Source and Amount of Funds or Other Consideration|
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.
|Item 4.||Purpose of Transaction|
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.||Interest in Securities of the Issuer|
(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||Type of Transaction||Number of Shares||Security Type||Price per Share|
|10/23/2020||Open market purchase||209,100.00||Common Stock||$3.1657(1)|
|10/26/2020||Open market purchase||200,000.00||Common Stock||$3.4724(2)|
|10/27/2020||Open market purchase||63,669.00||Common Stock||$3.5591(3)|
|10/28/2020||Open market purchase||107,600.00||Common Stock||$3.5964(4)|
|10/29/2020||Open market purchase||419,631.00||Common Stock||$3.7484(5)|
|11/9/2020||Open market purchase||250,000.00||Common Stock||$4.22(6)|
|11/10/2020||Open market purchase||11,169.00||Common Stock||$4.15(7)|
|11/13/2020||Open market purchase||365,000.00||Common Stock||$4.2093(8)|
|11/16/2020||Open market purchase||100,000.00||Common Stock||$4.3075(9)|
|11/17/2020||Open market purchase||273,831.00||Common Stock||$4.3972(10)|
|11/18/2020||Open market purchase||250,000.00||Common Stock||$4.2947(11)|
|11/19/2020||Open market purchase||150,000.00||Common Stock||$4.2844(12)|
|11/23/2020||Open market purchase||1,000.00||Common Stock||$4.3(13)|
|12/7/2020||Open market purchase||25,000.00||Common Stock||$4.4517(14)|
|12/8/2020||Open market purchase||100,000.00||Common Stock||$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
|Item 6.||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.
|Item 7.||Material to Be Filed as Exhibits|
|Exhibit 1||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).|
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