U.S. semiconductor manufacturer Wolfspeed (WOLF) has announced that it is filing for bankruptcy in the U.S.
News of the bankruptcy filing has Wolfspeed’s stock down 11% in premarket trading on June 23.
In a news release, Wolfspeed said that filing for protection from its creditors is part of a planned restructuring that will help the company cut its debt by 70%, or $4.6 billion U.S.
The bankruptcy filing will also help to reduce its annual interest payments by approximately 60%, said the Durham, North Carolina-based company.
Wolfspeed said it hopes to emerge from bankruptcy by the end of this year’s third quarter, which would be September 30.
Management said that Wolfspeed will continue regular operations throughout the bankruptcy and restructuring process.
The company also said that existing shareholders will receive between 3% and 5% of the shares of the reorganized company once it emerges from bankruptcy, a situation that could lead to potential dilution.
Over the past 12 months, WOLF stock has fallen 96% to trade at just $0.90 U.S. per share.
