CRT Capital Comments On GT Advanced Technologies Bankruptcy Proceedings; Recent Developments 'Generally Negative' For Bonds

Kevin Starke of CRT Capital attended

Thursday's creditor meeting in Manchester, New Hampshire. The analyst states that the company's chief financial officer and treasurer stated that the company intends to file with the court within 60 days updated schedules of assets and liabilities including intercompany balances which were previously omitted from those filed late last year. “This probably throws into doubt some investors' assertions that the various debtor estates will be substantively consolidated,” Starke wrote. “The company also intends to have a business plan ready within 60 days, though we suspect this will not be made publicly available and is more likely to be shared only with parties, such as the creditor committee or the ad hoc bondholder group if they agree to be restricted.” Finally, Starke states that the company “seemed to back away” from recent comments that the advanced sapphire furnaces in Mesa, Arizona could be sold for prices above $500,000 per unit. The analyst adds that the company's management called that price tag a “dream price” and “hypothetical,” suggesting that a $200,000 price tag is more realistic. Bottom line, Starke believes that these developments are “generally negative” for bonds.