Garrett is a name known far and wide in the car industry. The Swiss-based company is famous for building some of the best turbochargers in the business, supplying countless automakers. The firm announced Monday it has voluntarily filed for Chapter 11 bankruptcy protection to protect its long-term business sustainability, citing a downturn in sales thanks to the COVID-19 pandemic.
The news comes less than two years after Garrett spun off from its former parent company Honeywell International. According to Benzinga, Garrett took on "significant liabilities" during the spinoff in the form of payments to victims of asbestos exposure that originated from Honeywell's Bendix division.
"Garrett’s fundamentals are strong, but the heavy debt load and liabilities the company inherited following the spin-off from Honeywell, compounded by the financial strains of COVID-19, have created a significant long-term burden on its business development," the company said in a statement.
In addition to the debt restructuring process, Garrett has agreed—pending regulatory approval—to be acquired by KPS Capital Partners, a private equity firm, for $2.1 billion. The company expects to operate normally throughout the transition, continuing to provide products to its customers and retain connections with its suppliers. Hopefully, it'll mean more big Garrett-branded turbo swaps for years to come.
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