Andre Yoskowitz
9 Oct 2014 10:11
One of the biggest pieces of business tech news on Monday was the surprise bankruptcy of sapphire display supplier GT Advanced.
The company, which was worth $1.5 billion on Sunday night and is Apple's only sapphire crystal supplier, declared bankruptcy on Monday, catching investors off-guard. The company's stock fell 92 percent on Monday, only rebounding slightly since then. The company has a value of $175 million now, with many expecting that Apple will try to step in and help. Apple was equally as surprised as investors, at least according to their filing: "We are focused on preserving jobs in Arizona following GT's surprising decision and we will continue to work with state and local officials as we consider our next steps," read the updated regulatory filing.
However, a new report claims that Apple may have inadvertently pushed the company into bankruptcy. Reportedly, GTAT did not meet a required metric and Apple withheld the last portion of its loan to the the company. Says the report: "Apple had agreed to four prepayments to GT totaling $578 million -- contingent on meeting certain technical requirements -- to buy equipment for the facility. Apple didn't pay the final $139 million of its prepayment loans because GT didn't meet those technical milestones."
It's hard to imagine that Apple would knowingly bankrupt its only sapphire supplier, but there may have not been a way around it given the contract's possibly stringent restrictions.
Source:
WSJ