There was a rumor previous week that Apple and sapphire supplier GT Advanced Technologies were about to wash off their partnership. This would have pushed GT Advanced Technologies to shut down their sapphire production plant in Mesa, Arizona which is apparently owned by Apple itself. The alleged rumor is now a reality as GT has officially announced its Sapphire settlement with Apple.
According to the deal, GT Advanced Technologies will try to ask permission for selling over 2,000 sapphire furnaces installed at the plant. Most of the sales income will be utilized to repay the loan back to Apple that the company had given to GT in order to set up the plant. The amount that GT has to repay Apple accounts for $439 million.
The settlement agreement is subject to receive the approval from the Bankruptcy Court. If things go well, GT will be relieved from its obligations in the agreement with Apple. GT will actually hold the ownership of all the production in the plant, ancillary and inventory assets that are located in Mesa. According to the deal, GT can repay the loan it had taken from Apple in as many as four years without any interest being charged.
The sales of the furnaces installed in the plant will determine the repayment of the loan taken by GT Advanced Technologies. Although the ties between both companies have severed up after the deal is announced, they will still keep in touch as GT has not started to research about producing bigger sapphire boules weighing over 165 grams.
The companies are expected to hold meetings every quarter in order to discuss the progress made by GT and if there are any chances for the two companies to move forward together in a collaboration. However, a partnership between the two companies seems a rarity, but we will have to wait and see how things roll by with time.
Excerpts from the announcement:
Under the terms of the settlement agreement, which is subject to approval by the Bankruptcy Court, GT will be released from all exclusivity obligations under its various agreements with Apple. GT will retain ownership of all production, ancillary and inventory assets located in Mesa and Apple is provided with a mechanism for recovering its $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® [Advanced Sapphire Furnace] sales. The agreement provides for a mutual release of any and all claims by both parties. As a result of the agreed upon terms, GT retains control of its intellectual property and will be able to sell its sapphire growth and fabrication technology, including ASF and Hyperion™, without restrictions.