7 October 2014

GT Advanced Technologies files for bankruptcy court protection under chapter 11

GT Advanced Technologies Inc of Merrimack, NH, USA (a provider of polysilicon production technology as well as sapphire and silicon crystalline growth systems and materials for the solar, LED and power electronics markets) has, along with certain of its subsidiaries (collectively, GT), commenced voluntary cases under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of New Hampshire. The firm says it expects the court will authorize it to continue to conduct business as usual while it seeks to resolve its current issues and develops a reorganization plan.

As of 29 September 2014, GT had approximately $85m in cash. In addition, it is now seeking debtor-in-possession financing, which if obtained would provide an immediate source of additional funds. These funds would enable GT to satisfy the obligations associated with the daily operation of its business.

As a result of the filing, NASDAQ may temporarily halt trading in the GT’s stock pending the receipt of additional information on the firm's financial condition.

"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."

Market analysts say that the bankruptcy stems from a breakdown in the firm’s relationship with Apple. GT manufactures sapphire glass used in some Apple products, and it was anticipated that Apple business would account for more than 80% of GT’s 2014 revenues. According to financial services firm Raymond James, Apple loaned GT $350m to build a sapphire manufacturing facility, and some have speculated that Apple may have requested early repayment.

GT says it expects to provide additional details with respect to the chapter 11 filing as soon as possible. More information, including access to court documents, can be accessed at www.KCCllc.net/gtat (court- appointed claims agent site); or www.nhb.uscourts.gov, the official Bankruptcy Court web site. 

Tags: GT Advanced Technologies

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