GT Advanced Loan-Termination Fee Offsets Expected Earnings Gain

GT Advanced Technologies Inc., a U.S. maker of solar manufacturing equipment, said the cost of terminating a credit facility will offset the anticipated boost to its earnings from a $75 million stock repurchase.

GT Advanced will purchase 7.8 million of its common shares from UBS AG as part of an accelerated stock-repurchase plan, the Merrimack, New Hampshire-based company said today in a statement. It will retire the stock, driving up its per-share earnings.

The company is also paying a fee to terminate a credit facility from Credit Suisse Group AG that didn’t didn’t allow buybacks, said Ryan Blair, GT Advanced’s vice president of corporate communications. She wouldn’t give the size of the fee.

The potential increase in GT Advanced’s earnings for the current quarter “due to the reduction in shares outstanding is expected to be offset by the cost related to the early termination of the credit facility,” according to the statement.

GT Advanced reported earnings per diluted share of 29 cents for the quarter ended Oct. 1, its second fiscal quarter of 2012, and had 127 million shares issued and outstanding. The 7.8 million shares it plans to buy are equal to about 6.1 percent of the total.

The company plans to enter into a new credit facility by the end of this quarter to replace the one it one terminated last week, according to the statement. The previous facility comprised a $125 million term loan and $75 million of revolving credit.

GT Advanced will pay for the shares with cash on hand. The purchase is part of a previously announced $100 million buyback. The company dropped 3.4 percent to $7.38 at 11:26 a.m. in New York, its lowest price since Oct. 26.

The company makes equipment to produce polysilicon, the raw material in solar cells, and furnaces to grow synthetic sapphires, which are used in light-emitting diodes.

To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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