Wolfspeed Shareholders Face Near-Total Dilution as Court Approves Restructuring

A US court has formally approved Wolfspeed’s Chapter 11 reorganization plan, setting the stage for the semiconductor firm to emerge from bankruptcy protection within weeks. The ruling confirms a drastic financial overhaul that will see the company’s existing common stock essentially wiped out, delivering a devastating blow to current equity holders.

The plan received overwhelming support from the company’s creditors. More than 97% of secured bondholders and over 67% of convertible debt holders voted in favor of the proposal, which will fundamentally reshape the company’s balance sheet.

Central to the court-approved plan is an aggressive deleveraging initiative. Wolfspeed is set to eliminate approximately 70% of its total debt burden, representing a staggering $4.6 billion reduction. This financial restructuring will concurrently slash... Read more...