GT Advanced discloses financial details given in restructuring talks

By Caroline Salls

Pittsburgh, Dec. 7 – GT Advanced Technologies Inc. released some financial information provided to debtor-in-possession lenders in accordance with confidentiality agreements related to potential restructuring or refinancing transactions, according to an 8-K filed Monday with the Securities and Exchange Commission.

The information released includes the following:

• The company has continued to pursue a variety of original equipment manufacturers and companies in their supply chain in connection with its sapphire growth furnace business;

• The company does not believe a previously reported change in its senior management will have a significant adverse effect on its ability to sell its ASF sapphire growth furnaces (ASFs);

• The company owns its headquarters building in Merrimack, N.H., and is evaluating opportunities to monetize that building

• Recent cost reductions have decreased GT’s overhead costs by about $25 million, of which the majority is related to decreased headcount;

• The company plans to sell all of the assets in its Mesa facility other than its ASFs by its first quarter in 2016. As of Oct. 30, GT reduced its estimate of expected proceeds from the sale to $18 million from $30 million, primarily as a result of a reduction in the expected proceeds from the sale of the company’s Meyer Berger equipment and a reduction in expected proceeds from raw sapphire materials.

In addition, the company said its July 7 projections excluded the impact of a May 26, 2015 fire at the Mesa facility. At this time, GT said there is no guarantee that insurance proceeds will be sufficient to completely offset the losses caused by the fire.

The company said it intends, and continues to explore opportunities, to monetize its non-core assets before vacating the Mesa facility in December. Any non-core assets that have not been monetized by then will be abandoned or moved out of the Mesa facility;

• The GT debtors remain subject to $595 million to $990 million of unsecured claims;

• Of the $60 million to $80 million estimated net orderly liquidation value of the company’s non-core assets, GT said roughly $25 million gross orderly liquidation value has been sold, damaged in the Mesa fire or used in the ordinary course of business. In addition, as of Oct. 30, about $18 million gross orderly liquidation value was forecast to be sold by Dec. 15. The remaining non-core assets were estimated to have a $30 million to $35 million net orderly liquidation value, of which $9 million is located at the Mesa facility;

• As of Oct. 2, the company had received $926,000 of proceeds from non-core asset sales since the closing of the DIP credit facility on July 27; and

• The company has been notified that the Internal Revenue Service wants to conduct an audit of GT’s 2013 and 2014 tax years. The company said it is not aware of any regulation or procedure that would cause a delay in receiving the $24 million tax refund it expects to receive in the near future. However, GT said the impact of the audit on the timing of the refund, if any, is currently unknown.

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, 2014 under Chapter 11 case number 14-11916.

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