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Investing.com -- Wolfspeed Inc (NYSE:WOLF) stock surged 150% after the silicon carbide technology company filed for Chapter 11 bankruptcy protection as part of a prepackaged restructuring plan to reduce its debt by approximately 70%.
The company’s restructuring support agreement, which has backing from holders of more than 97% of its senior secured notes and over 67% of outstanding convertible notes, will cut about $4.6 billion in debt and reduce annual cash interest payments by approximately 60%. Wolfspeed expects to complete the process and emerge from bankruptcy by the end of the third quarter of calendar year 2025.
"With a stronger financial foundation, Wolfspeed will be better positioned to move faster on our strategic priorities and maintain our position as a global leader in the silicon carbide market," said Robert Feurle, Wolfspeed’s Chief Executive Officer.
The company emphasized that it will continue normal operations throughout the restructuring process, including delivering products to customers and paying vendors in the ordinary course of business. Vendors are expected to be unimpaired in the process, according to the company’s filing.
Wolfspeed has filed customary motions with the Court to support ordinary-course operations, including continuing employee compensation and benefits programs. The company expects to receive court approval for these requests shortly.
The restructuring plan represents a strategic move to strengthen Wolfspeed’s capital structure as it aims to accelerate its path to profitability while maintaining its position in the growing silicon carbide semiconductor market.
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