GT Advanced Technologies is filing for bankruptcy.
In an announcement on Monday, GT Advanced, which makes sapphire displays that many investors hoped would be in Apple’s newest iPhone, said that it was filing for Chapter 11 bankruptcy.
Ahead of the announcement, shares of GT Advanced were halted for trade.
In early September, shares of GT Advanced got crushed after the company’s sapphire displays were not in the latest version of Apple’s iPhone 6 and 6 Plus.
GT Advanced, however, signed a multi-year agreement with Apple last November to supply the company with sapphire material. That agreement included a $US578 million prepayment, which GT Advanced is set to repay Apple over a five-year period starting in 2015.
And over the last month, the stock has fallen about 35% from around $US17 per share to just under $US11.
Ahead of the latest iPhone announcement, investors hoped that the new phones would feature full sapphire displays, which is purportedly unbreakable.
Reports following the release, however, suggested that not only is sapphire glass scratch-resistant but not necessarily any more durable against being dropped that the current Gorilla Glass used in Apple’s iPhones, but that the material was never targeted for the latest iPhone models.
And what’s more, the material’s role in future iPhones is, at this point, unknown.
Here’s the full release from GT Advanced:
MERRIMACK, N.H., Oct. 6, 2014 (GLOBE NEWSWIRE) — GT Advanced Technologies Inc., (Nasdaq:GTAT), announced today that it had, together with certain of its direct and indirect 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. 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 reorganization plan.
GT indicated that as of September 29, 2014 it had approximately $US85 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.
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.
“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.”
The company indicated that it expects to provide additional details with respect to the chapter 11 filing as soon as they are available. 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.