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Wolfspeed Files for Chapter 11 to Cut 70 Percent of Debt

Backed by key creditors including Renesas, a prepackaged support deal aims to slash about 70 percent of liabilities ahead of a planned quarter-end exit from Chapter 11.

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U.S. power chip maker Wolfspeed’s silicon carbide 200mm wafer is seen on display at Wolfspeed’s Mohawk Valley Fab in Marcy, New York, U.S., April 2022. Courtesy of Wolfspeed/Handout via Reuters./File Photo
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Overview

  • On June 30, Wolfspeed officially filed for Chapter 11 bankruptcy protection to address its mounting debt and weakening demand in EV and industrial markets.
  • The restructuring support agreement targets a reduction of nearly $4.6 billion in liabilities and a 60 percent cut to annual cash interest payments.
  • Creditors and Renesas Electronics US have committed $275 million in new financing to sustain operations during the restructuring.
  • Wolfspeed holds $1.3 billion in cash and anticipates emerging from bankruptcy by the end of the current quarter while maintaining everyday operations.
  • Shares of Wolfspeed jumped more than 60 percent in extended trading following the bankruptcy filing.