Garrett Motion Inc (OTCMKTS:GTXMQ) has been in the news over the past week after the company made a key announcement with regards to the bidding process to sell the business.
It should be noted that the option for raising capital for the purpose of reorganization is also there.
Preserves $2.6 Billion Stalking Horse Bid
The announcement was made last Friday and since then the stock has gained momentum. Garrett Motion Inc (OTCMKTS:GTXMQ) has gained as much as 40% during the period. The bid will entertain all options, including an outright cash sale or a sale with co-investment rights.
In this regard, it is necessary to point out that the company also managed to obtain ‘stalking horse’ bid protections for KPS Capital Partners and its affiliates. The protections also have provisions for a termination fee to the tune of as much as $63 million and reimbursements for expenses incurred.
The price with respect to a stalking horse bid for the acquisition by KPS and its affiliates has been set at $2.6 billion. However, that is not all. The company or ‘New Garrett’ is also supposed to be listed on the stock exchange as a public company.
In addition to that, there are provisions that are aimed for the benefit of the current shareholders in Garrett. The current shareholders would have the option of buying shares in ‘New Garrett’ to the tune of $350 million as a form of co-investment.
The terms set for the shareholders are going to be the same as those for KPS and its affiliates.
Olivier Rabiller, the Chief Executive Officer of the company, spoke about the developments. He said that the company is pleased to have got relief from the court. He went on to state that Garrett is looking forward to getting involved in a fair and competitive process with regard to the bidding.
The auction date has been set for December 18.