GT Advanced Technologies Inc. (NASDAQ: GTAT) has made a surprising announcement, a move that will have certainly caught many shareholders off guard. The company announced Monday morning that it and certain of its direct and indirect subsidiaries have commenced voluntary cases under chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Hampshire.
Please note – this story has been updated to reflect the post-Halt trading.
GT indicated that as of September 29, 2014, it had approximately $85 million of cash. The company is also seeking debtor-in-possession financing to provide the company with an immediate source of additional funds.
GT said that it expects the court to authorize the company to continue to conduct business as usual while it devotes renewed efforts to resolve its current issues and develops a reorganization plan. As far as the new funding, these funding sources are represented as enabling GT to satisfy the customary obligations associated with the daily operation of its business.
While the stock was indicated down less than 1% at $10.98, shares were halted 9:40 a.m. Eastern Time. The company’s release said that Nasdaq may temporarily halt trading in the company’s stock pending the receipt of additional information on the company’s financial condition. It further said that it is cooperating with Nasdaq and will be providing any requested information as promptly as possible.
Tom Gutierrez, president and chief executive officer of GT Advanced Technologies, said:
GT has a strong and fundamentally sound underlying business. 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. We are convinced that the rehabilitative process of chapter 11 is the best way to reorganize, protect our company and provide a path to our future success. We remain committed to our roots in innovation and our diversification strategy. We plan to continue to operate as a technology leader across our core set of businesses.
The company indicated that it expects to provide additional details with respect to the chapter 11 filing as soon as they are available. Unfortunately, this potentially leaves the common stockholders in the wind. GT’s market cap at the time of the halt was $1.5 billion.
So much for being a great beneficiary of Apple’s glass needs. This situation remains one where there are more questions than there are credible and known answers.
UPDATE 12:20 p.m. Eastern Time: GT shares were down 89% at $1.23 on nearly 70 million shares.
UPDATE 11:00 a.m. Eastern Time: GT shares were down 85% at $1.61 on last look after being freed up to trade again.