GT Advanced Technologies announced Tuesday that it was actively pursuing the sale of its sapphire furnaces. A portion of the proceeds from the sale will go to Apple, which had loaned GT Advanced $439 million for the sapphire plant. The Merrimack, New Hampshire-based company’s announcement comes just days after the U.S. Bankruptcy Court approved a settlement with Apple.
GTAT has more than 2,000 furnaces
More than 2,000 furnaces were installed at GTAT’s Mesa, Arizona plant to produce sapphire glass for Apple. The Cupertino-based tech giant was supposed to use sapphire glass in its iPhone 6 and 6 Plus. But GTAT failed to provide sapphire to the iPhone maker. GT Advanced had invested heavily in the Mesa plant to increase sapphire glass production for Apple. But the company was forced to file for Chapter 11 bankruptcy after failing to supply sapphire to Apple.
Last week, the Bankruptcy Court approved a settlement between GTAT and Apple. Under the terms of the agreement, GT Advanced has four years to sell furnaces and repay Apple. The deal also avoided a costly litigation. It freed GT Advanced from several exclusivity agreements with Apple. It was granted full right to sell its sapphire furnaces, along with control over its sapphire-related patents.
GT Advanced preserving its cash
GTAT’s attorney Luc Despins had previously told the court that each furnace was expected to fetch about $500,000. But GT Advanced, Apple, and some creditors negotiated other provisions last week. They estimated that the first 500 furnaces would fetch $169,000 per unit. The next 500 were expected to generate $224,000 each.
Now GTAT will pursue opportunities for sapphire glass applications in the smartphone market, alongside the LED and industrial markets. GT Advanced CEO Tom Gutierrez said that the company has taken several important measures since its bankruptcy filing to reduce its cash operating expenses. As of Dec.19, the company had $96.7 million in cash and cash equivalents.
GT Advanced shares fell 0.83% to $0.416 at 12:10 PM EST. The stock has declined 96% since Oct.3.