22 November 2011

GT to repurchase $75m of its common stock from UBS

GT Advanced Technologies Inc of Merrimack, NH, USA (a provider of polysilicon production technology as well as sapphire and silicon crystalline growth systems and materials for the solar, LED and other specialty markets) has entered into an agreement with Swiss financial services firm UBS AG to repurchase $75m of GT common stock (under an accelerated stock repurchase program that is part of the $100m share repurchase authorization announced on 16 November).

GT will pay $75m to UBS in exchange for about 7.8 million shares of its common stock (currently estimated to be about 80% of the total shares to be repurchased under the agreement). The number of shares is based on GT’s closing share price of $7.67 on 18 November. The firm will make the payment from its available cash on hand.

The total number of shares ultimately repurchased under the agreement with UBS will be determined upon final settlement. GT’s effective per-share repurchase price will be based on the volume-weighted average share price of its common stock (minus a discount) during a period of up to four months, and the settlement amount will be equivalent to the $75m payment divided by the average share price, minus the number of initial shares.

Separately, GT says that it expects to enter into a new credit facility by the end of this quarter, replacing a credit agreement with Credit Suisse AG that was terminated on 18 November (since it did not meet the needs of GT’s growing business).

GT will immediately retire the shares purchased from UBS through the accelerated share repurchase (ASR). This will have an impact on earnings per share (EPS) for fiscal 2012, as the weighted average share count will be reduced. The firm will factor the new share count into the updated fiscal 2012 guidance that it will provide in early February. The increase in EPS for fiscal third-quarter 2012 (ending 31 December 2011) due to the reduction in shares outstanding is expected to be offset by the cost related to the early termination of the credit facility.

See related items:

GT authorizes $100m share buyback

Tags: GT Advanced Technologies Sapphire crystallization furnaces

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