GT Advanced looks to pay put premium for $95 million loan commitment

By Caroline Salls

Pittsburgh, March 16 – GT Advanced Technologies Inc. requested court approval to pay a put option premium and expenses to some unaffiliated GT convertible noteholders in connection with a $95 million debtor-in-possession financing commitment, according to a March 13 filing with the U.S. Bankruptcy Court for the District of New Hampshire.

Specifically, holders of GT’s 3% senior convertible notes due 2017 and 3% senior convertible notes due 2020 have agreed to backstop the financing.

The proposed put option premium is equal to 3% of the DIP financing commitment and would be payable in cash upon the earlier of the initial funding of the DIP loans and the termination of the commitment letter other than as a result of a breach by any of the backstop lenders to fund their commitments.

The proposed DIP facility will mature on the earliest of the 12-month anniversary of the closing date, the effective date of a Chapter 11 plan of reorganization and the acceleration of the DIP loans.

Interest will be 9˝% payable monthly in cash and 3% payable in kind.

The facility includes a 97% original issue discount.

GT said it will issue warrants on the plan effective date to the lenders, which will allow them to acquire 1.5% of the fully diluted capital stock of the reorganized company. The warrants will be exercisable immediately.

No warrants will be issued upon a sale of the company or all or substantially all of its assets before the plan effective date, provided that the DIP loans will be paid in full subject to a 2.5% prepayment penalty if the company or assets are sold before the effective date.

The DIP facility can be converted into exit financing on the plan effective date.

The DIP financing agreement requires GT to file a plan and related disclosure statement by Nov. 30, 2015 and to obtain confirmation of the plan by Feb. 15, 2016. The plan must take effect by Feb. 28, 2016.

As previously reported, GT Advanced initially selected TPG Specialty Lending, Inc.’s $100 million DIP financing proposal.

The company said it received a new and improved DIP financing proposal from the backstop lenders on March 9. That proposal was further revised and improved on March 13.

According to the motion, TPG had not submitted a revised proposal as of Friday. The company said the noteholders’ March 13 proposal “provides better economic and non-economic terms than the TPG commitment.”

On Monday, GT Advanced withdrew its motion for payment of fees and expenses in connection with the TPG commitment.

A hearing is scheduled for March 18.

Merrimack, N.H.-based GT Advanced Technologies is a provider of equipment and services that support the growth of the solar and LED industries. The company filed for bankruptcy on Oct. 6 under Chapter 11 case number 14-11916.

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