Hard to say because the polysilicon equipment market is boom or bust. And now they have to deal with the overhang of 2,036 sapphire furnaces coming out of Mesa as well. Add to that the fact that polysilicon may be entering a major upswing and you've got a very interesting situation.
I've been using $500M per year with 30% margins as a SWAG. That's been the average for the past 5 years. They had a $600M backlog as of June 30. I figure the equipment business could be worth somewhere around $1B, but notice how round the numbers are.
if the debt is gone then the bk will be cancelled
6:41p ET October 21, 2014 (Dow Jones)
By Peg Brickley
GT Advanced Technologies has signed a pact with Apple Inc. for an "amicable parting of the ways," Luc Despins, attorney for the bankrupt supplier to the technology giant, said Tuesday in the U.S. Bankruptcy Court in New Hampshire.
Mr. Despins said GT Advanced and Apple have agreed to file a revised explanation for GT Advanced's surprise bankruptcy filing as part of the pact, and ultimately erase from the public record the court papers that set out what went wrong in the relationship between the two companies.
Apple was involved in a $578 million financing arrangement that set GT Advanced up in the business of making the synthetic sapphire-screen material. Instead of GT Advanced's sapphire, Apple sent the new generation of iPhones out with screens made from a Corning Inc. material.
The lack of information about GT Advanced's Chapter 11 bankruptcy has caused a stir among creditors and shareholders shocked by what Senior Assistant New Hampshire Attorney General Peter Roth called GT Advanced's "catastrophic" collapse.
An Apple representative couldn't immediately be reached for comment. Apple has filed papers under seal in the case.
"What is the deal?" said Michael Stamer, lawyer for bondholders that have $185 million on the line in GT Advanced's bankruptcy. Speaking at Tuesday's court hearing, Mr. Stamer said investors have been waiting for details on GT Advanced's "grand bargain," with Apple, and weren't happy with promises that the settlement terms would be spelled out within days.
Mr. Despins said the proposed settlement allows GT Advanced to try to sell the furnaces at the Mesa, Ariz. sapphire-manufacturing facility, and give the money to Apple, which financed the equipment. GT Advanced would surrender its claims against Apple, under the deal, and agree not to disparage the technology giant, Mr. Despins said.
Why not right if apple ain't getting sapphire from mesa then their not using the space might as well let gtat get back to selling furnaces and make money somewhere
So this is actually shaping up OK for shareholders. We've known #1 was a total loss for a while now. Looks like we got an answer on #2 today. If reports are true and Apple released all claims against GTAT except for a percentage of the furnace sales, that is huge for shareholders and gives more than a sliver of hope. There was also mention that they could raise a DIP against the furnaces which would also be huge because they are going to need it for #3. If potential customers won't give them deposits, their only hope of maintaining a normal equipment business during the restructuring is to get a decent sized DIP. They may have killed two birds with one stone today. Getting interesting...
I have deep restructuring experience, have analyzed many bankruptcies professionally and went through one with an employer in a treasury role. I've also followed GTAT closely every day for the past 7 months. Despite what you been told IN CAPS LOCK MANY TIMES, the stock will not necessarily go to zero. There is a decent chance that it goes to zero, but it depends ultimately on: 1) the market value of the business after the resturcturing, and 2) the level of unsecured claims. If #1 is greater than #2, some shareholder value will be preserved. If not, .
The big questions in the restructuring are: 1) whether Mesa is a total loss or whether GTAT and AAPL can negotiate a restructured contract. It's impossible to guess at this outcome without more knowledge of the situation, including how bad the operations are, how bad Apple wants sapphire still and who has what leverage. 2) If GTAT does reject the AAPL contract in whole, what does Apple get in return, and most importantly do they get a sizable unsecured claim. And 3) how well GTAT's equipment businesses performs while it's being restructured, including whether Merlin and Hyperion are for real.
I hope everyone can comprehend the above even though IT WASN'T WRITTEN IN CAPS LOCKS!!! Nobody should invest real money in the stock at this point, but long term longs shouldn't necessarily sell at $1 either. This could still turn out many different ways. Less
Looks like a portion of those equipment will be going to GTAT for keeping quite plus what ever is left in coffer. GTAT can get back to business again and just pay the fees to get listed again.Time will tell but that person who bought 1.2 million shares AH.hmmmm
It knew where the Achillean heel for Apple was and singularly attacked the point. This is an incredible victory for David against Goliath. Other small companies may well try to replicate this tactic in the future in dealing with giants.
I would think Apple decided not to use sapphire which was at fault even though GTAT screwed up the ramp up as well. Apple will take a percentage of equipment sales from Mesa plant.
you were wrong. Apple is not taking the factory and equipment. Apple is walking away empty handed.
No. Apple is walking away free and clear except for a small percentage of furnace sales revenue.
Apple will take whatever proceeds from selling of 2000+ furnaces and forgive all money owed to it. In addition, Apple will give Mesa plant rent free for 1year to GT. GT may well satisfy all other creditors and get out of CH 11.