GTAT seeks new extension on financing plan
Merrimack-based firm’s losses continue to mount
GT Advanced Technologies is asking for another four months to complete a financing plan to help it climb out of bankruptcy while trying to sort out issues related to a Hong Kong subsidiary.
Meanwhile, the Merrimack-based company continues to lose tens of millions of dollars, including in April, when it lost $15.6 million. That brings total losses to slightly more than $350 million since October 2014, when GTAT filed for bankruptcy, though most the previous losses were paper write offs relating to the company’s disastrous deal with Apple.
Shareholders of the formerly publicly traded company had a negative equity of $279 million at the end of May. But the actual cash burn has been slower – the firm still has $55 million in cash compared to $85 million when it filed in October.
Under the Apple deal, GTAT was supposed to supply the technology giant with sapphire for mobile device touchscreens. But Apple’s decision not to use the material in its iPhone 6 drove GTAT into bankruptcy, forcing it to abandon a facility it had built outside of Phoenix and laying off hundreds of workers.
GTAT is seeking to finalize a $95 million financing package with bondholders that was signed in middle of March. However, “intercompany” issues concerning GTAT’s Hong Kong facility complicated matters and GTAT has yet to see that money.
GTAT has managed to pull off its first major furnace sale for more than $45 million, but it is unclear how much of that sum was used to pay off the $439 million the company still owes Apple. Citibank, for instance, thinks the money should go to pay off debts, a stance that has been making bondholders nervous.
If the four-month delay is granted, GTAT will have until the end of September to file a reorganization plan.