Semiconductor manufacturing company will apply for bankruptcy! See the full plan

Currently facing many problems, chipmaker Wolfspeed is planning to apply for bankruptcy in the US. The company said that this move will give it new funding and reduce the debt by about 70 percent. Wolfspeed is facing financial challenges due to changes in US trade policy and weak demand.

The situation will improve with the restructuring agreement

Wolfspeed said in a statement that the restructuring agreement with creditors and the US subsidiary of Renesas Electronics will receive $275 million in new funds from some existing creditors and help reduce the loan to $4.6 billion. Wolfspeed plans to get approval on its pre-packaged plan and come out of bankruptcy by the end of the third quarter of 2025.

In a pre-packaged bankruptcy, companies and their creditors agree on a reorganization plan before filing for bankruptcy, and creditors vote on the plan. The company intends to continue regular operations during the restructuring process. It had about $1.33 billion in cash and about $6.5 billion in debt as of March. According to Bloomberg News, other creditors including Apollo Global Management will acquire Wolfspeed.

A series of big decisions continues

Wolfspeed had announced a $1.25 billion debt financing led by Apollo in 2023, including an option to increase the total amount to $2 billion to expand operations in the US. Over the past few months, the company has made several changes in top leadership. The company appointed Robert Furley as its CEO in March and David Emerson as COO in May, while in May the company announced that it would cut its senior leadership team by 30%.