Apple and failed sapphire supplier GT Advanced reach agreement to settle $439M debt
After a high-profile supply chain failure last year, Apple and would-be sapphire supplier GT Advanced Technologies have reached an agreement that will settle the bankrupt company's $439 million in outstanding debt.
According to court documents filed with the U.S. Bankruptcy Court in New Hampshire on Monday, GTAT intends to auction off sapphire manufacturing equipment acquired during a buildout of operations connected to the company's defunct Apple partnership, The Wall Street Journal reports. GTAT is to keep up to 600 furnaces as part of the arrangement, while unsold items will go to Apple for disposal.
The deal comes one year after GTAT filed for chapter 11 bankruptcy protection for what it claims was a "classic bait-and-switch" heavily in Apple's favor. For its part, Apple said the partnership imploded due to GTAT's inability to deliver a sufficient number of quality sapphire boules.
Reports of Apple's partnership with GTAT first surfaced in November 2013, details of which were later aired in bankruptcy court. GTAT spent some $900 million to set up an advanced sapphire production facility in Mesa, Ariz., $439 million of which came from an advance from Apple. With the partnership dissolved, Apple is looking to recoup its initial layout.
GTAT subsequently adopted a "wind down" plan that required the company to sell off more than 2,000 sapphire furnaces, with cash proceeds going toward its sizable debt. The company was unable to meet that goal, leading to today's reported auction scheme.
According to court documents, GTAT has until Nov. 23 to auction off its remaining furnaces before an equipment move-out deadline on Dec. 31. The companies must await final approval from a bankruptcy judge before moving forward.