Garrett Motion Simplifies Capital Structure By Converting To Single Class Of Common Stock

Automotive tech provider Garrett Motion Inc GTX has entered into definitive agreements with shareholders Centerbridge Partners L.P. and Oaktree Capital Management L.P. for capital structure simplification.
Under the agreement, all outstanding Series A preferred stock will be converted into a single class of common stock on or about July 3, 2023.
The elimination of the Series A Preferred dividend will add over $100 million of incremental annual net cash flow to support investments.
The company has agreed to repurchase approximately $280 million of Series A Preferred Stock from Centerbridge and $290 million of Series A Preferred Stock from Oaktree for a total of $570 million, reducing Centerbridge's ownership from 22% to 15% and Oaktree's ownership from 23% to 15%, each on an as-converted basis.
Garrett has also announced an increase in the company's share repurchase authorization to $250 million.
In addition, Centerbridge and Oaktree will reduce their governance rights and lock up their remaining shares while remaining largest shareholders and maintaining one board seat each.
Price Action: GTX shares are trading lower by 3.27% at $7.98 in premarket on the last check Thursday.