GT Advanced Technologies Inc informed that it will cut off exactly 890 jobs and also close Arizona plant. Since GT Advanced Technologies Inc, Arizona plant expected to make Apple Inc scratch resistant screens and it may pursue legal claims against Apple for its bankruptcy.
The subsidiaries of the company also filed for bankruptcy with assets valued at $1 billion, which includes $85 million in cash the Chapter 11 of the Bankruptcy Code Petition. The worth of the US firm fell from $1.5 billion to $175 million. Tom Gutierrez, president and CEO of GT Advanced Technologies stated that the company would continue its sound underlying business.
The company said,
“Only if GT winds down these operations will it be able to stop its mounting losses and re-focus its resources on the operation of its core business of selling sapphire furnaces and other products,” and also said, “GT believes that it has many claims against Apple arising out of its business relationship with Apple,”
On response with GT Advanced Technologies Inc, Apple has pointed its earlier statements and also it would like to consult with various state and local officials on its further process.
Andrew Abrams, an Analyst at JG Capital said,
“It looks like if GT has its way, they will wind down their sapphire operations, and that’s a positive for the industry generally, and more specifically, as a primary supplier, for Rubicon, too,”
GT Advanced Technologies Inc said that it will wind down operations in Salem, Massachusetts and Mesa, Arizona, so that the company can preserve its dwindling cash. For Sapphire screen, Apple has provided around $578 million for Arizona plant and GT Advanced Technologies Inc agreed to pay that amount over a period of five years.
GT Technologies had signed a deal with Apple in November for supplying sapphire displays and also led to rumors that the displays would be used in the latest iPhone 6 which features a reinforced glass produced by ion process. Sapphire displays were chosen as it is the second strongest material on earth and resistant to scratches. However the brittle crystalline structure can crack when dropped.
On the Nasdaq, the GT Advanced Technologies Inc fell 38% down to 80 cents and the hearing will be held on coming Wednesday in Springfield, Massachusetts.
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