Wolfspeed, Inc. recently announced that the Committee on Foreign Investment in the United States (CFIUS) has granted formal clearance for the company's equity issuance to Renesas Electronics America Inc., marking a significant milestone in the execution of its prepackaged restructuring. This clearance represents the completion of a key component of Wolfspeed's previously announced restructuring agreement with its lender group in support of its Chapter 11 process.
As part of the court-approved restructuring plan, Renesas, a Tokyo-based global leader in advanced semiconductor solutions and a pre-petition creditor of Wolfspeed, has agreed to convert its outstanding unsecured loan into a combination of equity and secured convertible debt. Following the CFIUS clearance, Renesas will also receive a seat on Wolfspeed’s board of directors, with Aris Bolisay, Renesas’s vice president of finance, being appointed to the board.
The completion of the equity issuances will result in an increase in Wolfspeed’s total shares of common stock outstanding to approximately 45.1 million. This includes the issuance of 16,852,372 shares to Renesas, the final 2% equity recovery to be distributed to pre-petition shareholders (representing 871,287 shares), and approximately 1.5 million shares issued pursuant to prior conversions of the company’s second lien convertible notes.
Furthermore, in conjunction with clearing the final milestone and the Renesas equity release, Wolfspeed will also release the remaining 2% allocation of common stock to its legacy pre-petition equity holders. This distribution represents the final tranche of the 5% equity recovery granted to shareholders under the court-approved restructuring plan, with the initial 3% having been distributed on the plan’s effective date in September.
The completion of these milestones positions Wolfspeed to capture long-term growth opportunities while operating with sharper commercial execution and capital efficiency, according to Wolfspeed CEO, Robert Feurle.
Wolfspeed is a global leader in silicon carbide technology and production, and through its innovative semiconductor technology, the company is committed to powering a better world for everyone.
As a result of these developments, the company's total shares of common stock outstanding have increased, and with the completion of the equity issuances, Wolfspeed is moving forward with its strategic initiatives to broaden and diversify its customer base and expand its leadership in silicon carbide power devices. Following these announcements, the company's shares moved 2.16%, and are now trading at a price of $20.35. Check out the company's full 8-K submission here.
