GT Advanced Technologies plan of reorganization takes effect March 17

By Caroline Salls

Pittsburgh, March 17 – GT Advanced Technologies Inc.’s plan of reorganization took effect on Thursday, according to a notice filed with the U.S. Bankruptcy Court for the District of New Hampshire.

The plan was confirmed on March 8.

As previously reported, the plan term sheet embodies a global settlement of numerous confirmation issues, including issues related to intercompany claims, substantive consolidation and inter-creditor disputes over the allocation of equity in the reorganized debtors, and has the support of creditors holding substantial claims throughout the company’s capital structure.

GT said its exit financing consists of $60 million in principal amount of senior secured notes and $20 million in preferred stock.

The notes will accrue interest, at the GT debtors’ option, at a rate of 9% paid in cash or 11% paid in kind. The notes will mature in five years.

The company said the preferred stock will represent 86.8% ownership of the reorganized common stock on an as-converted basis, subject to dilution by a management incentive plan and DIP warrants.

The preferred stock will mature in 10 years.

The plan allocates a total of 13.2% of the common stock of the reorganized company to the holders of general unsecured claims and provides for the distribution of specified excess proceeds to holders of general unsecured claims, to the extent that unrestricted cash exceeds $40 million.

Holders of GT notes will receive a share of 21.6% of the reorganized common stock pool, 12.5% of the excess proceeds and warrants. All other general unsecured claims against GT Advanced Technologies Inc. will be separately classified, and the holders will receive a share of a cash recovery equal to the recovery by holders of GT notes, capped at $500,000.

Holders of general unsecured claims against GTAT Corp. will receive a share of 62% of the reorganized common stock pool and 72.5% of the excess proceeds.

Holders of general unsecured claims against GT Advanced Technologies Ltd. will receive a share of 16.4% of the common stock pool and 15% of the excess proceeds.

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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