Apple to recover $439 million from GTAT in settlement
It’s settled, GT Advanced Technologies Inc has reached an agreement with Apple Inc.
According to a statement from GT, they would be released from all exclusivity obligations under its various agreements with Apple. While GT will retain ownership of all production assets from Mesa, they will recover Apple $439 million pre-payment made to GT over a period of up to four years without interest, solely from a portion of the proceeds from ASF® sales.
GT will retain control of its intellectual property and be able to sell and develop its sapphire equipment to make the sapphire crystals.
In addition, the two companies will continue to have a “technical exchange” to develop the next generation of sapphire boules.
“We are pleased with the settlement that we have negotiated with Apple,” said Tom Gutierrez, president and chief executive officer. “We realize that our filing for Chapter 11 protection has caused uncertainty and hardship for many of our important stakeholders. We have been working diligently to develop a restructuring plan that will allow us to emerge from Chapter 11 as quickly as possible and with the operating flexibility and resources to position GT for long-term success. This agreement with Apple is an important step in that direction as it will allow us to monetize our advanced sapphire growth and fabrication technologies in an unrestricted manner. In addition to continuing to sell our industry leading sapphire equipment, we remain committed to advancing our Merlin™, Hyperion™ and next-generation PV and polysilicon solar solutions.”
On Monday, October 6 GT, filed Chapter 11 bankruptcy, which led to a nose dive with their stock, reaching $1.03 at one point.
There were high hopes for the GT and Apple partnership, especially with the expectations of more jobs in Arizona. However, once the iPhone 6 and 6 Plus were released, and the rumors about use of sapphire for the screen deemed false, questions about the vitality of GT came into question.
GTAT is already in the process of closing the sapphire production factories in Mesa and Salem, Massachusetts this week. To date, 650 Mesa employees have been laid off, and more is to come.