Restructuring Plans Official Wolfspeed Confirms Intention to File for Bankruptcy and Restructure

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Wolfspeed

Wuxi InfiMotion Technology Co., Ltd.

The rumor that the financially troubled semiconductor manufacturer Wolfspeed intends to file for Chapter 11 bankruptcy has been confirmed. The management of Wolfspeed officially presented the company's restructuring plans on June 22, 2025.

The rumor about Wolfspeed's Chapter 11 bankruptcy filing that emerged in May 2025 was confirmed by the company on June 22, 2025 according to the announcement. The announcement mainly outlines the details of the pre-negotiated restructuring plan, with which Wolfspeed has brought key creditors on board. The deal sought by the company's management includes reducing total debt by 70 percent (approximately $4.6 billion) and lowering annual cash interest payments by 60 percent.

Existing shareholders of Wolfspeed will receive three or five percent of the new common shares. If everything proceeds as planned, the restructuring is expected to be completed in the third quarter of 2025. The business will be financed by its own cash flows after completion. The Restructuring Support Agreement (RSA) was made with key creditors, specifically with 97 percent of the holders of the first-lien secured notes, with the US subsidiary Renesas, and with the holders of over 67 percent of the outstanding convertible bonds.

Wolfspeed CEO Robert Feurle commented: "After carefully considering various options to stabilize our balance sheet, we are convinced that this is the right strategic step for Wolfspeed. We have strong core competencies and a globally leading, fully automated manufacturing network for 200-mm silicon carbide wafers. With a solid financial foundation, we can fully focus on innovation in rapidly growing, electrified markets."

Details of the Planned Chapter 11 Reorganization

Wolfspeed emphasizes that the bankruptcy application will only be filed after obtaining creditor approval – a classic feature of a pre-packaged bankruptcy process. The pre-negotiated plan includes the following measures:

• $275 million in new financing through second secured convertible bonds, fully backed by existing bondholders.

• Repayment of $250 million in senior secured bonds at a rate of 109.875 percent, with simultaneously reduced interest and liquidity requirements.

• Exchange of $5.2 billion in existing convertible bonds and a loan from Renesas for $500 million in new bonds and 95 percent of the new common stock (pre-dilution).

• Existing shareholders will receive three to five percent of the new shares (depending on regulatory and operational conditions).

• Unsecured creditors are to continue being paid in the normal course of business.

The Chapter 11 filing is expected to occur shortly, with the process anticipated to be completed by the end of the third quarter of 2025. During the restructuring, Wolfspeed intends to continue business operations without interruption, including ongoing supply to customers, timely payments to suppliers, and the continuation of all employee programs including salaries and benefits.

To accompany the restructuring, Wolfspeed has set up its own information page at wolfspeedforward.com, which also includes FAQs and information for customers and suppliers. (sb)