Chipmaker Wolfspeed's stock slides on plans to file for bankruptcy
Jun. 23, 2025 1:46 AM ET
By: Arundhati Sarkar, SA News Editor
Wolfspeed (NYSE: WOLF) shares tumbled in premarket trading Monday after the struggling chipmaker announced plans to file for bankruptcy in the U.S. as part of a restructuring deal with creditors.
The transactions are expected to reduce the company’s overall debt by approximately 70%, representing a reduction of roughly $4.6 billion, and reduce the company’s annual total cash interest payments by approximately 60%.
In May, Wolfspeed raised concerns about its ability to continue as a going concern, as mounting economic uncertainty driven by shifting U.S. trade policies and declining demand led to a series of financial setbacks.
Wolfspeed (NYSE: WOLF) said that it has reached a restructuring agreement with creditors and the U.S. subsidiary of Renesas Electronics ( OTCPK:RNECY), which includes $275 million in new financing supported by certain existing creditors and aims to cut its debt by $4.6 billion.
The company plans to seek approval on its pre-packaged plan and subsequently emerge from bankruptcy by the end of the third quarter of the calendar year 2025.
“After evaluating potential options to strengthen our balance sheet and right-size our capital structure, we have decided to take this strategic step because we believe it will put Wolfspeed in the best position possible for the future,” said Robert Feurle, Wolfspeed’s (NYSE: WOLF) Chief Executive Officer.
Semiconductor supplier Wolfspeed has ~$1.3B of cash as of 3QFY25, providing sufficient near-term liquidity to support customers and pay vendors, the company said.
Wolfspeed, down 11% in early trading, plans to file for Chapter 11 bankruptcy protection by July 1. |
