GT Advanced Pursues $80 Million Loan to Exit Bankruptcy
November 30 2015 - 12:35PM
Dow Jones News
By Peg Brickley
GT Advanced Technologies Inc. has lined up $80 million worth of
financing to help it get out of a bankruptcy after its messy
breakup with Apple Inc.
The equipment manufacturer was enlisted to supply sapphire
screen material for Apple on a large scale, but the smartphone
maker spurned GT's offering, leaving it mired in debt.
GT Advanced's stint in chapter 11 bankruptcy began in October
2014, amid a fight with Apple that ended in a settlement. Since
then, the company has struggled to return to its mission as a maker
of industrial equipment and to find a way out of bankruptcy.
The company's existing lenders are offering bankruptcy-exit
financing including $60 million in new debt and $20 million in
preferred stock. The financing carries a 5% fee and other costs and
calls for GT to file a chapter 11 exit plan by Dec. 21. The plan
must be implemented in the first quarter of 2016.
In broad outline, the proposed chapter 11 plan would pay off
bankruptcy loans of about $50 million, plus fees, and cede
ownership of the company to creditors.
Investors backing the plan and the financing include senior
lenders and major investors in GT's debt, according to papers filed
Sunday in the U.S. Bankruptcy Court in New Hampshire. Names on the
deal include Jefferies LLC, QPB Holdings Ltd., Wolverine Flagship
Fund Trading Ltd., Citigroup Financial Products Inc., and Caspian
Capital LP. Unsecured bondholders that support the deal include AQR
Capital Management, LLC; Aristeia Capital, L.L.C.; Latigo Partners,
LP; New Generation Advisors, LLC and Pine River Capital Management,
L.P., court papers say.
Shareholders will recover nothing under GT's proposed
reorganization plan.
The offer of exit financing comes amid some positive news for
GT, including word of a sale of some of the furnaces that had been
used to make sapphire-screen material for Apple. GT has been under
the gun to sell the furnaces or to get them out of Apple's way, as
the larger company moves to reclaim its Mesa, Ariz., facility.
Last week, GT announced it has an offer of $26.6 million for 567
of the furnaces, from a buyer identified as Vast Billion
Development. GT has agreed to split the proceeds of furnace sales
with Apple as part of a settlement that clears up Apple's $439
million claim against the equipment maker.
Additionally, court papers indicate the company is expecting a
$23 million refund from the IRS before the end of January 2016.
GT Advanced has asked to hold on to sole control of the course
of its reorganization through Jan. 22, 2016, to avoid distractions
while it pushes forward with its strategy for resolving its debts
and getting out of bankruptcy.
Write to Peg Brickley at peg.brickley@wsj.com
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(END) Dow Jones Newswires
November 30, 2015 12:20 ET (17:20 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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