GT Advanced Technologies Inc. has filed for bankruptcy protection before the U.S. Bankruptcy Court, District of New Hampshire. The filing came after Apple released its new iPhones, which didn't include synthetic sapphire made by the company.
Last year, Apple invested about $578 million to GT Advanced to finance the heating system used to produce the material. However, many were surprised that when the iPhone 6 and iPhone 6 Plus came out, none of them were made with it.
"When Apple announced the iPhone 6, that came as a big surprise that there was no sapphire," Pierre Maccagno, an analyst with Dougherty & Co., said in an interview with Bloomberg. "They are highly dependent on Apple."
GT Advanced will start repaying Apple for the loan starting next year, when the Apple iWatch will reportedly be outfitted with the material.
Losing Apple came as a blow for GT Advanced, as the sapphire business accounts for more than 75 percent of the company revenue. The company suffered from a net loss of $86.4 million for the second quarter of this year. Stocks took a dive by 90 percent, hitting shareholders hard. According to the Forbes, the company will rely on cash reserves amounting to $85 million to continue its operations. The company has 1,100 employees in the United States and overseas.
"GT has a strong and fundamentally sound underlying business," said Tom Gutierrez, president and chief executive offer of GT Advanced Technologies. "Today's filing does not mean we are going out of business; rather, it provides us with the opportunity to continue to execute our business plan on a stronger footing, maintain operations of our diversified business, and improve our balance sheet."
