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  • Apple Objects to GT Advanced Technologies' Financing Plan

    Apple recently formally objected to a financing plan by its bankrupt former sapphire supplier, GT Advanced Technologies, on the basis that the provision were tied to a May fire at its previous Mesa, Arizona plant. GT said it needs to collect enough money from its insurance company to repair any damage done to the sapphire furnaces in the plant, the alternative being defaulted on a proposed $95 million loan agreement according to court documents obtained by Re/code.

    The Cupertino California company argued that GT has already mentioned that the damage was small and that the proposed terms would give the lenders too much leverage to foreclose on the furnaces if an insurance payout is deemed too low to make any repairs. GT would face the choice of defaulting either on its loan or the settlement it reached with Apple in 2014. A collection of GT shareholders have also complained regarding the matter, asking why the firm needs to raise money nine months into bankruptcy protection.

    For those of you who didn’t know, the fire started on the roof of the Mesa building but was extinguished in roughly 35 minutes. At the time it wasn’t clear what damage had been caused beyond the wrecking of some of the plant’s solar panels. Apple and GT Advanced Technologies previously partnered on the facility back in 2013 with the goal of mass-producing sapphire for devices such as the iPhone. GTAT ended up claiming bankruptcy in October 2014, stating that Apple had engaged in the “bait-and-switch” tactics and made unreasonable demands. The Cupertino California company on the hand claimed it had “bent over backwards” to help accommodate the supplier’s setbacks.

    We’ll have to see what comes of this whole ordeal but further issues between the two aren’t a surprise.

    Source: Re/code
    This article was originally published in forum thread: Apple Objects to GT Advanced Technologies' Financing Plan started by Akshay Masand View original post