GT Advanced files for bankruptcy
'Business as usual' while company sorts out its balance sheet
GT Advanced Technologies, which produces advanced materials and crystal growth equipment, has (with its subsidiaries) filed for bankruptcy court protection under Chapter 11 in the United States Bankruptcy Court for the District of New Hampshire.
GT expects the court will authorise the company to continue to conduct business as usual while it devotes renewed efforts to resolve its current issues and develops a reorganisation plan.
In November 2013, the company signed a multi-year, $578 million contract with Apple to supply advanced sapphire material for iPhone. The deal covers items such as the camera-lens cover window, the fingerprint-ID button, and (potentially) a full-screen sapphire touchscreen. GT is to produce the sapphire at Apple's facility in Arizona with around 700 GT employees.
GT indicated that as of September 29, 2014 it had approximately $85 million of cash. In addition, it is now seeking debtor-in-possession financing, which, once obtained, would provide the company with an immediate source of additional funds. These funding sources will enable GT to satisfy the customary obligations associated with the daily operation of its business, including the timely payment of employee wages and other obligations.
"GT has a strong and fundamentally sound underlying business," said Tom Gutierrez, president and chief executive officer of GT. "Today's filing does not mean we are going out of business; rather, it provides us with the opportunity to continue to execute our business plan on a stronger footing, maintain operations of our diversified business, and improve our balance sheet.
"We are convinced that the rehabilitative process of chapter 11 is the best way to reorganize, protect our company and provide a path to our future success. We remain committed to our roots in innovation and our diversification strategy. We plan to continue to operate as a technology leader across our core set of businesses."
As a result of the filing, and as is customary with public companies, NASDAQ may temporarily halt trading in the company's stock pending the receipt of additional information on the company's financial condition. The company is cooperating with NASDAQ and will be providing any requested information as promptly as possible.