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Wolfspeed Files for Chapter 11 With $275 Million Financing to Cut 70% of Debt

Securing $275 million in fresh financing, Wolfspeed aims to reduce leverage, keep production running, emerge from bankruptcy by quarter’s end.

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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

  • Wolfspeed filed for a prepackaged Chapter 11 in the Southern District of Texas backed by creditors including Renesas and Apollo Global, unlocking $275 million in debtor-in-possession financing.
  • The company entered bankruptcy with $1.3 billion in cash and expects to reduce about $4.6 billion of debt, or roughly 70% of its total, upon emergence.
  • Annual cash interest expenses are projected to fall by approximately 60%, easing its heavy debt-service burden.
  • Wolfspeed will continue delivering silicon carbide materials to customers and paying vendors in the ordinary course throughout the restructuring.
  • Shares surged over 60% in after-hours trading on the filing, reflecting investor optimism about the swift debt-relief plan.