GT ADVANCED TECHNOLOGIES, which was expected to produce sapphire crystal screens for the iPhone 6, has come to an agreement with Apple to pay back a $439m pre-payment handed over last year following its filing for bankruptcy.
Apple provided $578m in funding for the Arizona plant, which GT agreed to repay over five years beginning in 2015. The firms also worked on a facility in Mesa, Arizona.
GT filed for bankruptcy after shares plummeted 90 percent on 7 October, causing concerns about the availability of its sapphire screens which were due to be used in the forthcoming Apple Watch.
GT then tried to convince the court to break its contracts with Apple, which it claims imposed "oppressive and burdensome terms and obligations on GT", and were an "unnecessary drain" on its resources, reportedly costing $1m a day.
Strangely, at the first public hearing since the filing, lawyers for GT argued that the firm could not reveal why it sought bankruptcy and asked a court to keep crucial documents sealed, a highly unusual move that may keep investors in the dark for now about its financial implosion.
"GT believes that it has many claims against Apple arising out of its business relationship with Apple," the firm said in papers filed with the US Bankruptcy Court in Manchester, New Hampshire.
GT has now released a new statement saying that a settlement has been reached with Apple. The firms have agreed on a repayment plan which will steady GT's sapphire screens business.
"We are pleased with the settlement that we have negotiated with Apple," said Tom Gutierrez, president and chief executive of GT.
"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 monetise our advanced sapphire growth and fabrication technologies in an unrestricted manner."
Apple said that the work it was doing with GT was "ambitious", and that the company would consider its options with regard to sapphire screen manufacturing and the staff at the Mesa plant.
"Apple put a lot of effort into an ambitious new sapphire manufacturing process with GT which is not ready for production," Apple said in a statement. "We're going to continue evaluating GT's progress on larger sapphire boule development, as well as consider other options for the facility."
Apple said it will also work with Mesa and Maricopa County to help the GT employees who will be impacted by the ordeal to find new jobs. µ
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