Apple GT Advanced Relationship
Apple sapphire manufacturing partner GT Advanced Technologies filed for bankruptcy under Chapter 11 on Monday. Reuters

GT Advanced and Apple Inc. have reached an agreement that will see the Apple partner shut down its Mesa, Arizona-based sapphire production facility and repay $439 million to Apple after GT's mysterious bankruptcy filing on Oct. 6.

GT Advanced will likely raise that cash by selling off more than 2,000 furnaces used in the production process. The $439 million will be repaid to Apple without interest under the terms of the two companies' agreement.

The news sent GT shares up 14 percent to $0.60 on Nasdaq. Upon the initial news of the bankruptcy, shares got clobbered and plummeted 90 percent.

"We realize that our filing for Chapter 11 protection has caused uncertainty and hardship for many of our important stakeholders. We have been working diligently to develop a restructuring plan that will allow us to emerge from Chapter 11 as quickly as possible and with the operating flexibility and resources to position GT for long-term success. This agreement with Apple is an important step in that direction as it will allow us to monetize our advanced sapphire growth and fabrication technologies in an unrestricted manner," GT Advanced CEO Tom Gutierrez said in a statement.

The production plant closing will cost approximately 650 jobs.

Apple will still need a sapphire partner to manufacture screens for its forthcoming iWatch. It might consider Rayotek, whose marketing materials say it has partnered with Apple in the past.