GT Advanced Technologies files bankruptcy; Nasdaq may halt trading

By Caroline Salls

Pittsburgh, Oct. 6 – GT Advanced Technologies Inc. filed Chapter 11 bankruptcy Monday in the U.S. Bankruptcy Court for the District of New Hampshire, according to a company news release.

GT said it expects the court to authorize it to continue to conduct business as usual “while it devotes renewed efforts to resolve its current issues and develops a reorganization plan.”

As of Sept. 29, GT had roughly $85 million of cash. In addition, the company said it is now seeking debtor-in-possession financing, which, once obtained, would give it an immediate source of additional funds.

“GT has a strong and fundamentally sound underlying business,” president and chief executive officer Tom Gutierrez said in the release.

“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.”

Debt details

According to court documents, GT has more than $1 billion in both assets and debt. In a 10-Q filed in August with the Securities and Exchange Commission, the company reported $1,508,010,000 in assets and $1,292,181,000 in debt as of June 28.

The company’s largest unsecured creditors are:

• U.S. Bank NA of New York, with a $220 million claim related to the company’s 3% convertible senior notes due 2017 and a $214 million claim related to its 3% convertible senior notes due 2020;

• Manz of Reutlingen, Germany, with a $21.28 million trade payables claim;

• Tera Xtal Corp. of Hsinchi, Taiwan, with a $17.49 million contract dispute claim;

• Plansee SE, based in Reutte, Austria, with a $14.24 million trade payables claim;

• MBT Systems Ltd. of Columbia, N.J., with a $7.27 million trade payables claim;

• Elmet Technologies of Lewiston, Maine, with a $6.16 million trade payables claim;

• Hebei Hengbo Fine Ceramics Material of Handan City, China, with a $6.06 million trade payables claim;

• Sanmina Corp., based in San Jose, Calif., with a $4.18 million trade payables claim;

• Sumitomo Electric USA Inc. of Torrance, Calif., with a $3.75 million trade payables claim; and

• Graftech International Holdings Inc. of Parma, Ohio, with a $3.33 million trade payables claim.

As a result of the filing, GT said Nasdaq may temporarily halt trading in its stock pending the receipt of additional information on the company’s financial condition.

Trading restrictions

In addition, GT requested court approval of restrictions and notification procedures for trading in its equity interests and claims to preserve net operating losses (NOLs) and other tax attributes.

The company estimated that, as of Dec. 31, it will have NOLs of $152 million.

Specifically, holders of at least 4.75% of the company’s equity and claims must provide notification of proposed transfers of their stock or claims, giving GT the opportunity to object to the transfer to preserve the tax attributes.

If the company does object, the transfer cannot take place without further court order.

The procedures also require holders to declare their status as substantial equity or claimholders.

The company is represented by Paul Hastings LLP and Nixon Peabody LLP. Alvarez and Marsal North America, LLC is serving as GT’s restructuring adviser.

Merrimack, N.H.-based GT Advanced Technologies is a provider of equipment and services that support the growth of the solar and LED industries. The Chapter 11 case number is 14-11916.

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