GT Advanced reaches bankruptcy deal with Apple, will sell off more than 2,000 sapphire furnaces to pay debt
As part of its plan to "wind down" sapphire production operations after filing for Chapter 11 bankruptcy protection, GT Advanced Technologies will reportedly sell more than 2,000 sapphire furnaces to pay off an outstanding debt to Apple.
According Fortune's Philip Elmer-DeWitt, who was in court on Tuesday covering GT's bankruptcy proceedings, the firm has reached a deal with Apple to pay off its remaining debt by selling a total of 2,039 furnaces to third-party companies. The arrangement was described by GT's attorney as an "amicable parting of ways."
"Apple won't get the furnaces. It will take the cash from their sale as full settlement of the $439 million GT owes them," Elmer-DeWitt said in a post to Twitter.
Apple sunk $439 million into the GT deal, but since the sapphire maker was unable to deliver on agreed upon production goals, Apple withheld a final $139 million conditional payment and is now owed its upfront advances. GT subsequently filed for bankruptcy protection earlier this month, though the exact details surrounding the company's implosion are unknown.
In addition to the $439 million, Apple has agreed to let GT use the Mesa, Ariz., sapphire facility rent free for one year as the firm winds down operations. Last week, it was reported that GT is going to eliminate more than 700 jobs from Arizona plant operations by December.
Apple inked a $578 million contract with GT last November for production of raw sapphire material to be used in secret future products. At the time, Apple's use of the hard substance was limited to cover glass for the iPhone's rear-facing camera and Touch ID fingerprint sensor home button. The tech giant later announced plans for larger installations in certain Apple Watch models, which are slated to hit store shelves in early 2015.