Wolfspeed moves to slash debt through bankruptcy plan
US-based semiconductor manufacturer Wolfspeed has entered into a restructuring agreement with key creditors that will significantly reduce its debt load and cash interest expenses. The company plans to implement a pre-packaged Chapter 11 bankruptcy filing in the near future.
The proposed financial restructuring — backed by over 97% of Wolfspeed’s senior secured noteholders, more than 67% of convertible noteholders, and Renesas' US subsidiary — aims to cut the company’s total debt by approximately 70%, or USD 4.6 billion. Annual cash interest expenses are expected to decrease by around 60%.
As part of the agreement, Wolfspeed will receive USD 275 million in new funding through second-lien convertible notes.
To carry out the plan, the company will seek approval for its pre-packaged reorganisation and then file for Chapter 11 bankruptcy.
Despite the bankruptcy filing, Wolfspeed says it has sufficient liquidity — about USD 1.3 billion in cash as of its third fiscal quarter — to continue operations without disruption. The company expects to complete the restructuring process by the end of the third calendar quarter of 2025.
“All other unsecured creditors are expected to be paid in the ordinary course of business,” Wolfspeed stated in a press release, adding that it will continue to operate and serve customers with silicon carbide materials and devices throughout the process.
CEO Robert Feurle said the move is intended to “right-size” the company’s balance sheet and strengthen its long-term position in the fast-growing electrification market.
“Wolfspeed has tremendous core strengths and great potential. We are a global leader in silicon carbide technology with an exceptional, purpose-built, fully automated 200mm manufacturing footprint, delivering cutting-edge products for our customers. A stronger financial foundation will enable us to focus acutely on innovation in rapidly scaling verticals undergoing electrification where quality, durability and efficiency matter most,” Feurle said.
