GT Advanced Technologies, a New Hampshire company that struck a lucrative deal last year to supply sapphire screens to Apple, has filed for bankruptcy.
The company filed Monday to reorganize its finances under Chapter 11 protection of the U.S. bankruptcy code. It said it had about $85 million in cash as of the end of September, but needed to raise money to meet payroll and other obligations of its daily operations. In court documents, it estimated its assets and liabilities each exceed $1 billion.
Just last year, Apple reached a multi-year agreement with GT in which it committed to making advance payments of approximately $578 million to the supplier. Many believed Apple was considering sapphire — which is thin, strong and scratch resistant — as a replacement for Corning’s Gorilla Glass in its next-generation iPhone 6. That didn’t happen, though the material is to be used in the forthcoming Apple Watch.
GT’s sapphire crystal isn’t used in any current Apple products. A company spokesperson declined to say how the bankruptcy filing might impact future products, such as the Apple Watch.
GT did not respond to requests seeking comment.
As recently as August, GT reported in its second-quarter results the status of its operations within a 1.4 million-square-foot Arizona facility. The company said it had received a payment of $103 million for the project, and that it anticipated a fourth and final advance payment of $139 million from Apple, contingent upon achieving certain operational milestones.
The supplier said it expected to receive the payment by the end of October.
“Today’s filing does not mean we are going out of business,” said GT President and Chief Executive Tom Gutierrez in a statement. “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.”
Paul Semenza, president of NPD Display Technology Analyst Business, said Apple occasionally makes investments in specific display technologies to guarantee access to new technologies that could differentiate its products from others in the market.
In the case of its investment in GT, Apple would gain exclusive access to GT’s sapphire crystal, which would be produced in Apple’s own Arizona plant, and would be reimbursed for its $578 million advance over five years, starting in 2015.
GT’s stock lost most of its value in trading Monday, closing at 80 cents per share — down 93 percent from Friday’s closing price of $11.05.
Updated at 1:30 pm to make clear that none of the supplier’s sapphire crystal is used in current Apple products.
This article originally appeared on Recode.net.