GT Advanced Technologies Inc (GTAT.O) said it will cut 890 jobs, close an Arizona plant expected to make scratch-resistant screens for Apple Inc (AAPL.O), and suggested it could pursue legal claims against the iPhone maker while revamping under bankruptcy.
"Only if GT winds down these operations will it be able to stop its mounting losses and re-focus its resources on the operation of its core business of selling sapphire furnaces and other products," the company said on Friday.
GT Advanced said it was burning through $1 million a day at the operations it intended to close.
"GT believes that it has many claims against Apple arising out of its business relationship with Apple," the company said in a filing with the U.S. Bankruptcy Court in Manchester, New Hampshire.
The company said it could not pursue the unspecified claims at the outset of its bankruptcy, but that the claims would allow GT Advanced to terminate several Apple agreements that it said were burdensome and of no value.
Apple responded by pointing to its earlier statement that it remains committed to preserving jobs in Arizona and was consulting with state and local officials on its next steps.
Shares of Rubicon Technology Inc (RBCN.O), a rival maker of sapphire material, surged about 23 percent to $4.93 on Nasdaq.
"It looks like if GT has its way, they will wind down their sapphire operations, and that's a positive for the industry generally, and more specifically, as a primary supplier, for Rubicon, too," said Andrew Abrams, an analyst at JG Capital.
However, Srini Sundararajan of Summit Research said Rubicon's rally was "an over-reaction to GTAT shutting down."
GT Advanced filed for Chapter 11 bankruptcy with little warning on Monday, sending its shares plummeting 90 percent to below $1.
The company has provided only scant details of the cause of its bankruptcy and turnaround plans.
The company said in Friday's court filing it needed to wind down operations in Mesa, Arizona and Salem, Massachusetts as soon as possible to preserve its dwindling cash. The process would take until the end of the year, it noted.
GT Advanced reached an agreement with Apple last year to transform itself from a supplier of sapphire furnaces to a manufacturer of sapphire for Apple. The iPad maker provided $578 million in funding for the Arizona plant, and GT Advanced agreed to repay the money over five years, starting in 2015.
The first sign of trouble came in September when Apple indicated its iPhone 6 would use rival Gorilla Glass instead of sapphire material.
GT Advanced asked the bankruptcy court to end 13 contracts with Apple, including a confidentiality agreement that has forced the bankruptcy to be conducted with unusual secrecy.
GT Advanced would be liable for $50 million for each violation of the confidentiality agreement, court papers show.
On Nasdaq, GT fell 38 percent to 80 cents, and Apple was little changed at $101.05 late Friday afternoon.
A hearing will be held on GT Advanced's requests on Wednesday in Springfield, Massachusetts.
The bankruptcy case is In re: GT Advanced Technologies Inc, U.S. Bankruptcy Court, District of New Hampshire, No. 14-11916
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