Oaktree Capital Management and Centerbridge Partners are seeking the support of Honeywell International Inc. for their proposed Garrett Motion Inc. bankruptcy loan as they consider making a bid for the assets of the bankrupt auto supplier, Bloomberg News reported. The two investment firms would aim to cut a deal with Honeywell to resolve Garrett’s $1.3 billion in disputed asbestos liabilities and win the conglomerate’s approval for their bid, according to people familiar with the plans. Honeywell hasn’t yet indicated its position, and other creditors may pitch additional proposals. Garrett looks attractive to many potential buyers or investors as its finances are largely stable apart from the asbestos liability overhang. Garrett filed bankruptcy this week, in part because of asbestos reimbursements owed to Honeywell, its former parent. Honeywell objected to a proposed bid from KPS Capital Partners at a court hearing on Monday, saying that the deal would relieve Garrett of its responsibility for the asbestos payments. Garrett said at that hearing that it would consider Oaktree and Centerbridge’s competing loan proposal, which could put them in prime position to ultimately own Garrett. Auto-parts maker Garrett was part of Honeywell until its 2018 spinoff, and blames the firm’s asbestos-related liabilities for helping put it into bankruptcy this week. Making a deal with Honeywell to resolve those claims would provide a potential bidder with an upper hand in the company’s bankruptcy auction process.
