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Failed Apple supplier GT Advanced looks to exit bankruptcy with $80M financing

Financiers have positioned floundering ex-Apple partner GT Advanced Technologies to emerge from bankruptcy with $80 million in funding, a plan that could allow the beleaguered former sapphire supplier to reposition itself as an industrial equipment manufacturer.




Details on GT Advanced's hopes to exit bankruptcy were filed in court this week, as summarized by The Wall Street Journal. The proposal calls for lenders to put up $60 million in new debt and $20 million in preferred stock by early 2016.

The plan provides no consolation for former shareholders in GT Advanced, however, as the reorganization plan offers no consolation to investors.

GT has about $50 million in remaining bankruptcy loans that must be paid off, plus fees. Ownership of the company will be ceded to creditors.

Apple reached an agreement with GT Advanced earlier this month to settle $439 million in outstanding debt. To finance the payments, GTAT had intended to auction off sapphire manufacturing equipment acquired during a buildout of operations connected to the company's defunct Apple partnership.

Court documents from earlier this month said GTAT had until Nov. 23 to auction off its remaining furnaces. It is unclear if those terms were met, but the agreement also had a move-out deadline of Dec. 31.

In their original supplier agreement, GTAT spent some $900 million to set up an advanced sapphire production facility in Mesa, Ariz., of which $439 million came from an advance from Apple. The company uses scratch-resistant sapphire for its Touch ID fingerprint sensors, iPhone rear camera coverings, and higher end Apple Watch faces.

GT Advanced was positioned to be a key supplier of sapphire for Apple, but the company was unable to deliver a sufficient number of quality sapphire boules.