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  • GT Advanced Technologies Seeks to Exit Bankruptcy with $80M Financing Strategy


    Several financiers have positioned the floundering ex-Apple partner, GT Advanced Technologies to emerge from bankruptcy with $80 million in funding. This plan could allow the former sapphire supplier to reposition itself as an industrial equipment manufacturer. According to The Wall Street Journal, the details of the strategy to exit bankruptcy were filed in court this week. This proposal calls for lenders to put up to $60 million in new debt and $20 million in preferred stock by early 2016.

    The plan doesnít provide consolation for former shareholders in GT Advanced as the reorganization plan offers no consolation to investors either. GT has roughly $50 million in remaining bankruptcy loans that must be paid off, plus fees. Ownership of the company will be ceded to creditors in this case.

    For those of you who didnít know, Apple reached an agreement with GT Advanced earlier this month to settle $439 million in outstanding debt. To help finance the payments, GTAT had intended to auction off sapphire manufacturing equipment acquired during a buildout of operations connected to the companyís previous partnership with Apple. The court documents from earlier this month said GTAT had until November 23 to auction off its remaining furnaces. It remains unclear if those terms were met but the agreement also had a move-out deadline of December 31.

    In the original supplier agreement, GTAT ended up spending roughly $900 million to set up an advanced sapphire production facility in Mesa, Arizona, where $439 million came from an advance from Apple. The company uses scratch-resistant sapphire for its Touch ID fingerprint sensors, iPhone rear camera coverings and higher end Apple Watch faces. GT Advanced was previously positioned as a key supplier of sapphire for Apple but the company was unable to deliver a sufficient number of quality sapphire boules.

    Weíll have to wait and see if GT Advancedís bankruptcy exit strategy works out for the company.

    Source: The Wall Street Journal
    This article was originally published in forum thread: GT Advanced Technologies Seeks to Exit Bankruptcy with $80M Financing Strategy started by Akshay Masand View original post