Good morning, welcome to the Garrett Motion Investor Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Eric Birge, Garrett's Head of Investor Relations. Please go ahead.
Thank you, Jason. Good day and welcome everybody. Thank you for joining the Garrett Motion Investor Conference Call. Before we begin, I would like to mention that today's presentation and press release are available on the IR section of the Garrett Motion website at investors.garrettmotion.com. There you will find links to our SEC filings along with other important information about the company. Turning to slide two, we note that the presentation contains forward-looking statements within the meanings of U.S. Federal Securities law and Regulations. We encourage you to read the risk factors contained in our filings with the Securities and Exchange Commission, become aware of the risks and uncertainties in our business, and understand that forward-looking statements are only estimates of future performance and should be taken as such. The forward-looking statements presented by management today are expectations only as of today.
The company disclaims any obligation to update them except as required by law. Today's presentation and our supporting materials include non-GAAP measures, which we believe are helping and evaluate how we manage and operate our business. These non-GAAP measures should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. We reconcile each of these measures to the most direct comparable GAAP measure. You are encouraged to examine those reconciliations as they are found in the appendix of our slide presentation for today. Also in today's presentation, comments may be referred to as light vehicle diesel or light vehicle gasoline products by using the terms diesel and gasoline only. With us on today's call is Olivier Rabiller, Garrett's President and Chief Executive Officer, and Sean Deason, Senior Vice President and Chief Financial Officer.
I will now hand the call over to Olivier.
Good morning, everyone, and thanks for joining. I will start on slide number four. I am glad to be speaking with you all about this milestone transaction today. We are at the beginning of a new chapter for Garrett and an exciting step in our ongoing business transformation. We'll get into details of the transaction on today's call, and at a high level, this step will convert all Series A Preferred Stock into a single class common stock in an orderly way, eliminating the uncertainty of the Series A automatic conversion process and normalizing our capital structure. This normalized structure will allow us to broaden our shareholder base, enable enhanced flexibility to return capital to shareholders, and provide additional cash for targeted organic reinvestment in the business.
Equally important, this initiative complements and accelerates the transformational work underway to further enhance our technology leadership in turbochargers and other solutions for diesel, gas, and electrified applications as we continue to position the company for success in an evolving market. We've been working to normalize our capital structure for over a year, redeeming our Series B preferred stock and also forming a Preferred Conversion Committee of disinterested directors to explore solutions that would convert our Series A preferred stock into common stock. We've also been engaging in discussions with our Series A shareholders on value-maximizing pathways to achieve this normalized structure. We have been very focused on being intentional about this conversion to both remove the element of uncertainty and facilitate the transition to common stock in an orderly fashion which minimizes volatility. We strongly believe this will help maximize shareholder value.
We announced on April the fourth that our strong performance could allow Garrett to satisfy the Consolidated EBITDA threshold, one of two remaining conditions for the automatic conversion as early as Q2 2023. Just to mention a few highlights of our strong performance since the Series A preferred stock was initially put in place in 2021. First, we redeemed $620 million of Series B preferred stock rapidly over three quarters from Q4 2021 to Q2 2022. We then started to pay the Series A dividend in cash in Q3 2022. We also generated $313 million of Adjusted Free Cash Flow in 2022, setting a clear path to a range of $300 million-$400 million of Adjusted Free Cash Flow in 2023.
The only other remaining conversion condition is the achievement of a 75-day VWAP of common stock price of more than $7.875. In other words, the excellent financial performance of Garrett has put us well on our way to meeting all the automatic conversion conditions for the Series A's that are within our control. The only remaining condition is linked to our share price, which is subject to market volatility and changes in macroeconomic sentiment with the last several weeks as a clear example due to the banking crisis. The transaction we have announced today, which was approved by the Preferred Conversion Committee and our full board, eliminates this uncertainty about conversion timing. It simplifies Garrett's capital structure by converting all Series A preferred stock to common stock in a structured, organized fashion, thus resulting in one class of Garrett equity.
It also reduces investor rights of certain large shareholders. This transaction is a result of productive discussions with Centerbridge and Oaktree, which represent a majority of the Series A preferred holders. Both will remain significant Garrett shareholders and board members going forward as they continue to support our business transformation. We've greatly valued our partnership with both firms over the last two-plus years. We've evolved our strategies and invested in new technologies. We appreciate their continued confidence in our business. As part of the transaction with Centerbridge and Oaktree, all Series A preferred stock is expected to convert into common stock on or about July 3rd, 2023. Garrett has reached agreement to repurchase approximately $280 million of Series A preferred stock from Centerbridge and approximately $290 million of Series A preferred stock from Oaktree.
The agreements contemplate the repurchase at the market-based price without premium. Both firms will reduce their investor rights, including a reduction in their number of board designees, and lock up their remaining shares. This transaction will be financed by $700 million of new debt, which is expected to be in the form of a new Term Loan B under Garrett's existing credit agreement, subject to certain modifications. We expect the financing to be consummated in Q2, 2023. Finally, the Preferred Conversion Committee and our board of directors have approved an increase in our existing share repurchase authorization to $250 million.
We expect to fund share repurchases with excess Term Loan B proceeds, cash on hand, given our robust liquidity, and improved cash flow from the $100 million of annual net cash flow benefit that we expect to result from not paying the Series A 11% coupon going forward, this net of incremental interest. I close up this slide by noting importantly that progress on our key strategic initiatives, continued trends in cash flow generation, and visible and resilient earnings have all strengthened our confidence in our ability to fund growth while also returning capital to shareholders. Turning to slide number five. Let's now look at the key benefits of this transaction. As mentioned, this transaction simplifies Garrett's capital structure, removing uncertainty surrounding the timing of Series A conversion and giving shareholders greater liquidity with a single class of common shares.
Centerbridge and Oaktree will continue to remain large holders and maintain one seat each on the board of directors. Both have agreed to lock up, staggered at six and 12 months, signaling their continued support and strong conviction in Garrett Motion. Centerbridge and Oaktree have also agreed with the company to certain customary limitations, including certain limits on their ability to purchase additional equity securities and voting limitation for a period up to 18 months. It's important to note that all of these changes are being coordinated carefully so that this is all as organized and seamless as possible. I would like to take this opportunity to highlight the strong and close collaboration we have with Centerbridge and Oaktree. Both firms are instrumental in the acceleration of the company's strategic plan, both on the core turbo business and new zero-emission technologies.
I am confident that this relationship will stay strong as they will remain major shareholders of Garrett following the transaction. The transaction will give Garrett a multi-billion dollar common stock market capitalization, facilitating the transition to a diversified shareholder base with continued meaningful long-term institutional ownership. The transaction could also broaden index membership and increase related weightings. The transaction is indeed significantly accretive to Garrett's already robust cash flow, positioning us to deliver in the short term. We expect to generate over $100 million of incremental net cash flow annually when accounting for the elimination of the annual Series A dividend, net of the increased interest expense from the incremental Term Loan B.
In summary, this transaction enhances our strategic flexibility for both organic and inorganic growth while improving our ability to return capital to shareholders, considering that our board has also approved an increase in our share repurchase program up to $250 million. I will now hand it over to Sean.
Thanks, Olivier. Good morning, everyone. Moving to slide six, I'll now provide an overview of the repurchase and governance elements of the transaction. Garrett will repurchase approximately $280 million of Series A preferred stock from Centerbridge and approximately $290 million of Series A preferred stock from Oaktree, for a total of $570 million. Centerbridge and Oaktree will be paid a cash purchase price of $8.10 per share or the five-day common stock VWAP through April 11th. The $8.10 purchase price will be adjusted to equal the common stock VWAP for the 15 trading days following the announcement, subject to a minimum price of $7.875 per share and a maximum price of $8.50 per share.
Additionally, as part of the transactions, all holders of Series A preferred stock will receive payment for accrued preference dividends. To be more specific, all holders of Series A will receive an amount equal to approximately $0.17 per share. The preference dividends that will accrue on the Series A preferred stock through June 30th, 2023, plus approximately $0.68 per share, the accrued and unpaid preference dividends on the Series A preferred stock as of June 30th, 2023, plus approximately $0.14 per share, the preference dividends that would have accrued through September 30th, 2023. Other than the preference dividends that would have accrued through September 30th, 2023, the $0.14 just discussed, which will be paid in cash, these amounts may be paid to all holders in cash, stock, or a combination of cash and stock at the election of the company.
Any stock issued will be valued at the adjusted purchase price paid to Centerbridge and Oaktree. Centerbridge and Oaktree will continue to be meaningful holders of Garrett equity, each holding approximately 15% pro forma and on an as converted basis. They and their affiliates have agreed to staggered lockups. 50% of their remaining stakes are subject to a six-month lockup. All of their stakes will be released from lockup after 12 months. Garrett's governance will also be simplified while retaining meaningful involvement from Centerbridge and Oaktree. Both will keep one director on the Garrett board relative to the three they have today. The Certificate of Designations for the Series A preferred stock will be amended to provide for the conversion. Turning now to slide seven, let's discuss how this transaction transforms our capitalization and cash flow profile.
Importantly, the transaction will create a single class of common equity with greater liquidity. This will convert two traded equities with a perceived common market capitalization of $500 million to a single class of common equity with a multi-billion dollar market capitalization. It will also diversify Garrett's shareholder base with no individual holder with greater than approximately 15% pro forma ownership on an as converted basis. By eliminating the $160 million annual Series A cash dividend, the transaction will unlock over $100 million of annual net cash flow benefit, which can be used to return capital to shareholders and applied to targeted growth investments, either organic or inorganic.
The transaction will result in pro forma gross debt to last twelve months Consolidated EBITDA of approximately 3.2x and net debt to last twelve months Consolidated EBITDA of approximately 2.7x based on the last twelve months Q4 2022 financial results. This is within the range of our peers and is a range we feel comfortable operating at. We will have ample liquidity and significant runway with no debt maturities in the near term. On slide eight, you can see why we are confident in our ability to rapidly delever and return to our 2x net leverage target following the transaction. We have a track record of achieving over $300 million of annual free cash flow even when we were burdened by the Series B interest payments.
This strong cash flow, along with over $100 million of annual net cash flow benefit provided by this transaction, will help us service our debt. We've also proven that we can rapidly delever as we redeemed $620 million of Series B over three quarters and reduced net leverage by 0.7x over the past six quarters. I also want to highlight again that this transaction eliminates approximately $160 million of annual Series A dividend payments. Series A dividends are paid out of Adjusted Free Cash Flow or the $365 million and the $313 million you see here on the page for 2021 and 2022 respectively. The Series A dividend will no longer burden Adjusted Free Cash Flow.
This will strengthen our ability to return capital to all shareholders and make targeted investments back in the business. On slide nine, we would like to bring this section of the presentation to a close by noting our strong performance year to date as previously highlighted in our April 4th announcement. Stronger volumes, robust operational performance, and favorable foreign exchange are driving better than expected financial results year to date. Full year net income and Adjusted EBITDA are currently forecasted to be in the upper end of our prior outlook. We will provide an update on our outlook in our next earnings conference call on April 24th. The guidance we included on this page is just a recap of the latest outlook ranges as published on February 14th. Next, I would like to hand it back over to Olivier to discuss the next chapter for Garrett Motion.
Thank you, Sean. I want to thank all of our shareholders, common and Series A, for their support over the last few years. This transaction is a testament to our operational progress and will enhance our ability to continue investing in organic and inorganic growth, deliver the balance sheet and return capital to shareholders. As I said earlier, this step complements and accelerates our business transformation initiatives. I will now take us through the key pillars of our business moving forward and the transformation into Garrett next steps. On slide 11, as you can see, Garrett is the number one global turbocharging technology company for automotive and commercial vehicle applications. We are proud to have manufactured over 120 million turbochargers in use globally.
Alongside our market-leading products for combustion application, we are also making significant investments in our products for electric vehicles, spending over $90 million on electrification RD&E efforts annually. Our expanding and innovative electrified product portfolio shows immense promise. Our products are key enablers of CO₂ reduction, we are focused on developing and marketing technologies for electric vehicle applications as we adapt to changing automotive landscape. Garrett is in fact driving meaningful differentiation in electrification with unique cutting-edge knowledge and capabilities which have great momentum behind them. We discuss those in more depth later. This focus is central to Garrett's next chapter. Turning to slide 12. We are truly at the forefront of innovation as we develop new technologies for both combustion and electric applications.
Garrett's next chapter will be defined and bolstered by our leadership in a consolidating industry and our exceptional cash flow generation, our strong earnings visibility and resilience, our differentiated technologies and innovation, particularly in zero emissions, and our enhanced capital allocation strategy. We will dive into these highlights more next. On slide 13, you can see that as the global leader in turbocharging technology for automotive and commercial vehicles, we are at a central player in the automotive supply chain. Our industry is consolidating and Garrett is a key beneficiary of this trend. To give you a sense of our leadership, Garrett has achieved a win rate of greater than 50% since 2018, which means that we have contracted more than 50% of all addressable customer awards.
This increasing share of demand is unique in the industry and further enhances our cash flow generation, enabling us to support major investments in our new technologies. We are the first to bring new technologies and innovation to market. We do it at scale and have proven we can do it at a fast pace. We have a long history of achieving industry first, dating back to 1962, when we developed the first turbocharger for a passenger vehicle. Moving forward, we intend to bring that long history of industry leadership to electrification technologies, where we are developing new differentiated technologies and have already won new pre-development and development contracts with major OEs. Our success is not a coincidence.
We have been selective and thoughtful in terms of where we compete, and that has paid off as we now lead across our key verticals, gasoline, light vehicle, diesel light vehicle, and commercial vehicles. Turbos are highly specialized and the most expensive engine components. We are proud to be a trusted partner to some of the most prominent global OEs, many of which we have a 30+ year relationship with. We co-develop and co-innovate with our customers and as a result, have a high degree of customer loyalty and stickiness, as well as a superior visibility into volumes and upcoming trends and innovations. We also serve customers throughout the full life of the engine, which can extend beyond 20 years, and this drives some very attractive high margin aftermarket business for us. Our position of leadership and commitment to operational excellence enable Garrett's best in class financial metrics.
We have achieved average annual Adjusted Free Cash Flow of $340 million over the last two years and a 15.8% Adjusted EBITDA margin. With CapEx of less than 3% of net sales and 80% variable cost structure and 85% of our production in low cost region, we have a nimble capital-light model which allows for flexibility to adapt quickly in response to shifting markets and customer needs. Turning to slide 14. Our strong financial results are underscored by high level of earnings visibility and resilience. Our book of contracted business is multi-year, and each year we start essentially with a fully booked business pipeline, giving us a very significant visibility of financial performance up to four or five years in the future.
For instance, our awarded OEM business already represents 80% of our projected 2026 sales, highlighting strong visibility into revenue quite far into the future. This is further supplemented by our aftermarket business, which provides long-term revenue generation as we serve customers throughout the entire life of an engine. The visibility we have is bolstered by our track record of strong share of demand and increase expected in internal combustion engine turbocharger penetration and overall growth in light vehicle production in the coming years. Our leading position and greater than 60% win rate, which we've consistently maintained, put us on an ideal position to capture future industry growth and increasing turbo penetration. As we mentioned before, turbochargers are a critical enabler of the path to net zero, and this is expected to drive our top line over the coming years.
About 50% of our gasoline awards are related to hybrid platforms, confirming that our core turbo business is well-positioned to benefit from the growth of hybrid as part of our transition to more electrified powertrains. While global internal combustion engine vehicle volume is expected to decline, growing turbo penetration and our strong share of new gasoline and hybrid launches will support Garrett's growth profile for multiple years ahead. Another key contributor to our earnings resilience is the high and growing share of commercial vehicle, industrial, and aftermarket revenues as part of our business. In term of revenue contribution collectively, these three verticals represent today about 1/3 of the business. While we do not guide on profitability by vertical, we note that commercial vehicle, industrial, and aftermarket are higher margin than our overall business on the whole, and they comprise an even greater proportion of total profitability.
On slide 15, I now want to discuss a central part of Garrett's business transformation, the expansion of our technology to serve the electric vehicle market. Our proactive strategy in developing and marketing this solution will position Garrett for success as the automotive landscape continue to shift. This is not a defensive strategy, but an offensive one as we focus our resources on the opportunities offering the highest potential for technology differentiation, which is what Garrett is about. What makes Garrett's electric vehicle arm different is our talent. The 400 industry-leading engineers who bring significant expertise across core electrification competencies. This has driven innovation in Garrett's best-in-class product for the electric vehicles market. Our air compression turbomachine provide high-speed balancing and can operate in harsh environments. Garrett's high-speed motors provide best-in-class power density, operating at 10x typical automotive speeds with a compact format.
Our power electronics operate at an industry-leading 30 kA switching frequency, which with a unique compact design for high-power motor control, and our control software operates 6x faster than our closest competitors, optimizing energy efficiency. We are indeed continuing to build out our electrification team to accelerate the development of these solutions and are allocating greater than 50% of our annual R&D budget to these growth efforts. Turning to slide 16. Our innovation focus allows us to design and build vertically integrated electrification solutions that are technologically superior to other products on the market. We offer a leading solution that customers are excited about across Fuel Cell, E-Powertrain, and E-Cooling. We expect our strong focus on operational excellence will allow us to commercialize electrification solutions at scale while maintaining very attractive profitability level for the company.
We are also proud to announce our 2030 revenue target of greater than $1 billion of revenue from zero-emission technologies at margin level that are accretive to today's company-wide margin. We are very confident in this outlook, given wins that have resulted in an attractive order backlog of over $350 million and current business momentum in Garrett's electrification solution. I will now turn it back to Sean to speak about capital allocation priorities.
Thanks, Olivier. Turning now to slide 17. We have talked a lot about our ability to generate superior cash flows over the coming years, we are equally focused on capital allocation as we continue to make strategic growth investments and return capital to shareholders. We strongly believe the four pillars laid out on this slide will help us maximize shareholder value and position Garrett ideally for the future. As we think about our capital allocation strategy, we evaluate disciplined organic reinvestment, net leverage, return of capital to shareholders, and M&A. Thoughtful, targeted organic reinvestment will continue to be a critical pillar for us, particularly as we further our electrification portfolio. We already invest significant dollars into RD&E or nearly 5% of our revenue in 2022.
We've included it here as a pillar for good measure, but we would note that Garrett invests meaningfully in RD&E today, and we don't intend to make any step changes even now that we are better positioned with $100 million of annual net cash flow benefit. Beyond this, we currently expect to generate over $300 million of Adjusted Free Cash Flow in 2023, which we plan to deploy to return to 2x net leverage, conduct share repurchases under our expanded $250 million share repurchase authorization, and potentially do strategic bolt-on M&A. Turning to slide 18, I'll now turn it back to Olivier to discuss key takeaways.
To summarize, this announcement is a tremendous opportunity to normalize our capital structure. The transaction diversifies and broadens the shareholder base, enables greater trading liquidity, brings over $100 million of annual net cash flow benefit and results in a more typical public company governance structure and equity base. We are undertaking this recapitalization with support from Centerbridge and Oaktree, significant Series A shareholders that are committed to our business transformation. With this normalized capital structure, we will be empowered to begin a new chapter in our growth story. As the Series A dividend falls away, we will use the additional incremental free cash flow to return capital to shareholders and invest in both our electrification and ICE technologies.
We will continue building on our rich history of innovation, industry leadership, and long-standing customer relationship with OEMs as we continue growing in both existing and new verticals. We see a bright future ahead of Garrett, for Garrett, and we are looking forward to embarking on this next new chapter. Thank you all for joining us today to learn about this transaction and our strategic vision. We will now take questions.
We will now begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble our roster. Our first question comes from Brian Sponheimer from Gabelli Funds. Please go ahead.
Hi, good morning, Olivier and Sean. How are you? Congratulations.
Thanks.
Thank you.
All right. You can hear me. A couple questions. One, just about the timing of when discussions really ramped with the private equity sponsors. You know, you put out pretty good targets about a week and a half ago or a week ago. Could you give some timing as to when the discussions really ramped to get this done?
Well, quite some time ago, you know that the board is always looking at the future of the company. We've always said that the consolidation of the capital structure was a priority for the company as soon as we could. We had done a number of steps already with the redeeming of the Series B and then the launch of the payment of the dividend in cash in Q3. Discussions had been ramping up, and at some point, we decided a few months back to appoint a special committee of disinterested directors so that they would really screen the best option for the company for moving forward.
Yeah. Okay, great. I guess, Sean, on slide seven, there's the $1.9 in gross debt post-transaction. Just help me with figuring out some math here. That doesn't include the potential for, by my math, $244 million or so in unpaid and potentially accrued dividends, the $0.17, the $0.68 and the $0.14. Is that correct?
The $0.14 will be paid in cash.
Okay.
It's the company's option to pay in kind or in cash for the other two.
Okay. just the $1.886 does not include the other two then? On slide seven.
That is the way the model is, that is the way the model is currently contemplated, correct.
Yeah, I'm gonna have to answer some questions. Okay, wonderful. Thank you very much.
I think we can, Brian, we can follow up with you separately on that.
Of course. Yep. Thank you.
The next question comes from Hamed Khorsand, from BWS Financial. Please go ahead.
Hi. I just wanted to understand, you know, you've talked about zero-emission vehicles in the past quite a bit and, you know, the business model and how you're transitioning there. What's transpired in the business over the last, you know, three, six months that you feel comfortable that, you know, this is the right strategy at this moment and with the debt taking on extra debt? What are you seeing in the business from that aspect that you think the free cash flow will be there for you on a sustained basis?
That's a very good question. First, we are not changing our strategy. We have a very strong position on the turbo business. The turbo penetration is increasing. We are increasing our share of demand on that very important vertical for us. That gives us the long-term visibility on the cash flow that we are talking into the presentation. Let's keep in mind that all the investment we've made to support this growth initiative on a zero emission vehicle are investment that are already funded as part of our RD&E budget that is close to 5%. We have been very successful for the last five years to progressively rebalance to fund that.
It's not like this initiative or the way we explain today our zero emission vehicle strategy is changing in any way, the way we are looking at the company. We have the flexibility that is linked to the strong position on the core business and the very important cash generation of the company. You think about it, we are generating between $300 million-$400 million of free cash flow after investment into ZEV vehicles to the tune of this $90 million of RD&E. That's a very important point to keep in mind. The second point is that we are investing into technologies where we have technology differentiation capabilities.
Therefore, and now it's proven with the number of contracts, and this is the first time we are that precise about our outlook and some of the contracts that are driving this transformation. We can now assume that on a per product basis, the margin will be accretive, compared to what we had, which is the result of the thoughtful strategy we had to select the opportunities in electrification that would offer these opportunities. I don't see today, any restriction or any limit on the cash flow generation that would be linked to that transition. To the opposite w e have a very strong position that enables that.
Great. My other question was just about the debt funding. Is the cost gonna be exorbitant for you given where interest rates are, and how are you planning for that? You know, are you contemplating if it's gonna be fixed or not?
We're contemplating that it'll be a Term Loan B. It'll be at current market rates, and we can determine whether or not we fix some of it out synthetically. It will, we expect that the net interest expense after tax will be about $50 million of cash interest approximately at this stage. While more expensive because interest rates have risen, we still think it produces a favorable cash flow result, a very favorable cash result for the company.
I would add that, the market is always open for companies generating great cash flow like we do. We think and we've been working on that quite a bit, that there is no limitation to access that. The de-leverage profile of this company, when you look at what we did for the redeeming of the Series B and what we did for the dividend, is proven.
Okay, great. Thank you.
If you have a question, please press star then one. Our next question comes from Eric Newman from TowerView. Please go ahead.
Thank you. Good morning. Can you hear me?
Yes, we can.
Great. Just a question around the $0.14 and the separate $0.85 that can be paid at the company's election. The agreement you've reached with Centerbridge and Oaktree is paying them fully in cash. I'm just wondering why the rest of the preferred holders aren't getting the same treatment. It would seem to make sense, we own the same security that it would make more sense to pay everybody in cash. Thanks.
Sure. Just to be clear, the $0.14 is for everyone. The remaining amounts, the Q2 dividend and the accrued amount, is at the company's election in cash or in kind. We would.
Great. for that $0.85, why not commit to pay the full dollar in cash as you're doing for Centerbridge and Oaktree?
That's, again, I'm coming back to that's our option, and we need to see how the next quarter plays out. It's going to take about two months for this transaction to complete, and we want to have the flexibility to have that optionality. We have not made a decision yet.
Okay. And just one follow-up, you know, since Centerbridge and Oaktree.
Just a precision on your question. If you're asking about the accumulated dividend that we had, the treatment is the same for everyone.
Right. For Centerbridge and Oaktree, half of their ownership is being repurchased at $8.10 in cash. That has not been offered to the other holders.
That's a different question.
I'm saying why not treat, why not treat everybody the same across the transaction? That's my question.
Yeah, maybe we want to get back to why we did this transaction. Today we are seeing a lot of benefit into the transaction, which is we are accelerating the conversion from a point of certainty standpoint, because we're having this uncertainty on the price. We want to do that in an organized way. The second point is that we are normalizing the governance rights. You know that we have governance rights that were associated with Centerbridge and Oaktree that we are reducing nomination rights to the board of three each back to one, for example. We are also getting Centerbridge and Oaktree into very significant lockups and restrictions that commit Centerbridge and Oaktree for the long term of the company.
obviously all of that, we are getting greater liquidity into the share as a result. That's what drove us to negotiate that deal with Centerbridge and Oaktree. We can probably follow up on calls if there are some specific elements that needs to be clarified on the announcement.
Okay, thank you.
This concludes our question and answer session. I would like to turn the conference back over to Olivier Rabiller for any closing remarks.
One more time, this is a very important milestone for the company, the normalization of the capital structure. It offers to us a lot of opportunities for the future that we've been detailing today on the call. It's getting us into another point of transformation into a very organized way, tackling any kind of uncertainty that could have delayed that conversion, point number one. Also, normalizing the capital structure, normalizing the governance right of the company, and turning this company more and more like a public company that many investors would like to hold for the long run, considering the performance, but also the outlook that we have and that we've explained to everyone today.
Conference has now.
Thank you.
Sorry. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.