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Standoff Pit is at odds with one another as some of Wall Street’s smartest financiers seek to profit from a tormented company at the heart of the US to promote domestic production of critical technologies.
WolfSpeed is currently responsible for $6.5 billion in total debt, including $1.5 billion in senior secured loans held by a group led by Apollo Global Management. The Senior Lenders Group manages WolfSpeed’s ability to sell additional secured obligations.
Convertible bondholders, including Balyasny Asset Management and Shaolin Capital Management, are concerned that they will be able to choose bankruptcy options too quickly when holding large cash buffers.
The company signed a deal with the Biden administration last fall to secure $750 million from the Chips Act, but has yet to receive funds after the change in management. Its market capitalization has fallen from $4 billion in 2024 to just $500 million.
WolfSpeed promotes its US-based manufacturing operations to its China-based competitors. In recent years, it has spent a lot of money on manufacturing capacity, hoping to exceed $800 million a year in revenue driven by increased EV sales.
However, the weakness in sales to date has become vulnerable to heavy debt loads as the popularity of EVs has eased. The executive explained about the business that he would soon reach an “inflection point.”
They said WolfSpeed has $1.3 billion in existing “cash and liquidity” and “continue to maintain constructive dialogue with the Trump administration at its Chip Program Office on Federal Funds.”
According to several people who were described in the negotiations, the company is tackling the dilemma between narrowly solving immediate 2026 maturity using higher cost obligations that could potentially reduce debt loads, bringing shareholders to zero.
In a statement last week, WolfSpeed said:
