Renesas expects significant loss following Wolfspeed restructuring deal
As previously reported by Evertiq, Wolfspeed has entered into a restructuring agreement with key creditors aimed at reducing its debt load and cash interest expenses. Renesas Electronics is among the parties that have signed the Restructuring Support Agreement, a move expected to result in a substantial financial loss for the Japanese semiconductor company.
Back in 2023, Renesas entered into a silicon carbide wafer supply agreement with Wolfspeed and provided a USD 2 billion deposit to Wolfspeed. That figure was later increased to USD 2.062 billion. However, due to Wolfspeed’s financial difficulties and its consideration of a court-supervised restructuring, Renesas has now agreed to convert the full deposit into a combination of Wolfspeed convertible notes, common stock, and warrants.
Under the agreement, Renesas will receive USD 204 million in convertible notes due in 2031, representing 13.6% of Wolfspeed’s shares on a non-diluted basis, common stock equivalent to 38.7% of Wolfspeed’s issued shares (17.9% fully diluted) and warrants corresponding to 5% of shares (on a fully diluted basis).
Wolfspeed's restructuring is expected to proceed under Chapter 11 of the US Bankruptcy Code, with the company likely to file a petition shortly. The plan is currently targeted for completion by the end of September 2025.
As a result of this agreement, Renesas anticipates recording a loss of approximately JPY 250 billion (USD 1.71 billion) in the first half of fiscal 2025 (January to June).
