GT Advanced secures approval to wind down sapphire mining facilities

By Caroline Salls

Pittsburgh, Oct. 24 – GT Advanced Technologies Inc. received court approval to wind down operations at its sapphire mining facilities in Mesa, Ariz., and Salem, Mass., as well as approval of a related wind-down employee incentive plan, according to an Oct. 24 filing with the U.S. Bankruptcy Court for the District of New Hampshire.

GT said the cash burn at its sapphire manufacturing operations for the benefit of Apple Inc. is not sustainable. As a result, the company said it must wind down the sapphire mining operations in question to preserve the value of its estates.

The wind-down plan also includes reductions in associated supporting personnel at GT’s Merrimack, N.H., offices.

The process is designed to allow for the operations to be wound down by Dec. 31.

The company said the total task completion bonus cost for 70 employees would be $181,000.

As previously reported, GT announced on Thursday that it reached a settlement agreement with Apple under which GT will wind down its sapphire materials production in the facilities in question.

The company said it will exit from the market as a producer of sapphire materials and will refocus its business as an equipment supplier, manufacturing and developing sapphire growth systems and processes.

Under the settlement, which is subject to bankruptcy court approval, GT will be released from all exclusivity obligations under its various agreements with Apple. GT will retain ownership of all production, ancillary and inventory assets located in Mesa.

Apple will have a mechanism for recovering its $439 million prepayment made to GT over a period of up to four years without interest, solely from a portion of the proceeds from ASF technology sales.

As a result of the decision to wind down the sapphire materials operations, GT said Thursday that it recently initiated the process of shutting down the Mesa facility, and about 650 Mesa employees have been laid off. The company said it expects that there will be additional reductions in force implemented in the coming days, which will affect its Salem, Mass., Merrimack, N.H., and select Asia locations.

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 company filed for bankruptcy on Oct. 6 under Chapter 11 case number 14-11916.

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