Troubled Supplier GT Advanced Reaches Settlement With Apple GT Advanced Technologies, which filed for Chapter 11 bankruptcy protection earlier this month, reached an agreement with Apple under which it will stop making sapphire materials.
This story originally appeared on Reuters
GT Advanced Technologies Inc said it reached an agreement with Apple Inc under which it will stop making sapphire materials and focus on supplying equipment to make sapphire crystals.
GT said it would be released from all exclusivity obligations with Apple and a mechanism would be provided for the iPhone maker to recover its $439 million pre-payment to the company, without interest.
GT, a former supplier to Apple, filed for bankruptcy on Oct 6 in a stunning turn of events for a company whose fortunes looked bright only a few months ago.
Few details have emerged since the filing, which wiped out most of GT's market value and triggered speculation on what may have soured its relationship with Apple.
At a hearing this week at the U.S. Bankruptcy Court in Springfield, Massachusetts, GT said the expected deal with Apple would save money and allow it to be more open about its mysterious Chapter 11 filing.
GT said on Thursday it would shut down its sapphire production factories in Mesa, Arizona and Salem, Massachusetts. It has laid off about 650 employees at the Mesa plant and expects additional job cuts in Salem.
GT will retain control of its intellectual property and will be able to sell its sapphire fabrication technology without restrictions, it said in a statement.
GT said it would continue its "technical exchange" with Apple but did not provide details about the nature of its future relationship with Apple.
(Reporting by Sayantani Ghosh in Bangalore; Editing by Saumyadeb Chakrabarty)