Renesas Electronics Tag Archive

Renesas Electronics Corporation announced that it has entered into a Restructuring Support Agreement with Wolfspeed, Inc. and its principal creditors for the financial restructuring of Wolfspeed. As a result, Renesas expects to record a loss as described below.

1. Details of Loss

As announced in July 2023, Renesas entered into the silicon carbide wafer supply agreement with Wolfspeed, and through Renesas’ wholly owned subsidiary in the United States, it provided a deposit (the “Deposit”) of US$2 billion (approximately 292.0 billion yen) to Wolfspeed. In October 2024, Renesas and Wolfspeed amended their agreement and increased the outstanding principal amount of the Deposit to US$2.062 billion (approximately 301.1 billion yen). 

Subsequently, Wolfspeed has experienced financial challenges. On May 8, 2025, during its quarterly earnings call, Wolfspeed disclosed that to achieve its stated goal of strengthening its balance sheet, it may implement a transaction through an in-court solution. Due to Wolfspeed’s contemplation of an in-court option, Wolfspeed included required going concern language in the footnotes to its financial statements for the quarterly period ended March 30, 2025. 

In response to this situation, Renesas has been engaging in discussions with Wolfspeed and today entered into the Restructuring Support Agreement among Wolfspeed and its principal creditors, pursuant to which Renesas agreed to, among other things, convert the Deposit of US$2.062 billion into convertible notes, common stock, and warrants issued by Wolfspeed as follows (the “Restructuring”).

(i) Wolfspeed convertible notes: US$204 million (approximately 29.8 billion yen) in aggregate principal amount, convertible to Wolfspeed common stock, maturing in June 2031. These notes are convertible into 13.6% of Wolfspeed’s total issued shares on a non-diluted basis at the time of the completion of the Restructuring. On a fully diluted basis, and prior to the exercise of the warrants to be granted to Renesas, this corresponds to 11.8%.

(ii) Wolfspeed common stock: equivalent to 38.7% (17.9% on a fully diluted basis, prior to Renesas warrants exercise) of the total number of issued shares of Wolfspeed at the completion of the Restructuring.

(iii) Wolfspeed warrants: equivalent to 5% (on a fully diluted basis) of the total number of issued shares of Wolfspeed at the completion of the Restructuring.

The Restructuring is expected to be consummated through proceedings under Chapter 11 of the U.S. Bankruptcy Code. It is expected that Wolfspeed will file a petition with the court to initiate such proceedings in the near future. The Restructuring is expected to become effective by the end of September 2025, subject to court approval of the restructuring plan. If the necessary regulatory approvals have not been obtained by the time the Restructuring takes effect, Renesas will hold rights to instruments with equivalent economic value to Wolfspeed’s convertible notes, common stock, and warrants until those approvals are received.

In connection with the signing of the Restructuring Support Agreement, Renesas expects to record a loss on the deposited receivables related to the Deposit in its consolidated financial statements. Although the timing and amount of such loss have not been determined at this time, Renesas believes that there is a possibility of recording a loss of approximately 250 billion yen (converted at an average exchange rate of 150 yen to the dollar during the period) in the consolidated financial statements for the six months ending June 30, 2025. Please note that this amount is an estimate calculated by Renesas’ internal analysis based on the currently available information and may increase or decrease due to various factors. The definitive timing and amount of the loss to be recorded will be determined in consultation with Renesas’ auditor and will be announced once it is determined.

2. Future Outlook

Renesas discloses revenue, gross margin, and operating margin on a “Non-GAAP” basis and does not disclose a forecast for profit attributable to owners of parent. Therefore, there is no change to the forecast for the six months ending June 30, 2025, announced on April 24, 2025.

Original – Renesas Electronics

Wolfspeed, Inc. announced that, as part of its efforts to proactively strengthen its capital structure, it entered into a Restructuring Support Agreement (the “RSA”) with key lenders, including (i) holders of more than 97% of its senior secured notes, (ii) Renesas Electronics Corporation’s wholly owned U.S. subsidiary and (iii) convertible debtholders holding more than 67% of the outstanding convertible notes. The transactions envisioned by the RSA are expected to reduce the Company’s overall debt by approximately 70%, representing a reduction of approximately $4.6 billion, and reduce the Company’s annual total cash interest payments by approximately 60%.

By taking this proactive step, the Company expects to be better positioned to execute on its long-term growth strategy and accelerate its path to profitability. This marks the positive culmination of discussions between the Company and key lenders to restructure the Company’s capital structure on an expedited basis and help to ensure Wolfspeed maintains its position as a leader in the silicon carbide market.

“After evaluating potential options to strengthen our balance sheet and right-size our capital structure, we have decided to take this strategic step because we believe it will put Wolfspeed in the best position possible for the future,” said Robert Feurle, Wolfspeed’s Chief Executive Officer. “Wolfspeed has tremendous core strengths and great potential. We are a global leader in silicon carbide technology with an exceptional, purpose-built, fully automated 200mm manufacturing footprint, delivering cutting-edge products for our customers. A stronger financial foundation will enable us to focus acutely on innovation in rapidly scaling verticals undergoing electrification where quality, durability and efficiency matter most.”

Feurle continued, “As we move forward, we are grateful for the confidence and support of key lenders, who share our vision for the future and believe in our growth prospects. I also want to thank our incredibly talented team for their resilience and hard work, and our customers and partners for their ongoing support.”

Additional Information Regarding the RSA

Key terms of the RSA are as follows:

• Pursuant to the transactions contemplated by the RSA, the Company will receive $275 million of new financing in the form of second lien convertible notes, fully backstopped by certain of its existing convertible debtholders.
• The RSA contemplates a paydown of its senior secured notes of $250 million at a rate of 109.875%, with certain modifications to reduce go-forward cash interest and minimum liquidity requirements.
• The RSA also contemplates an exchange of $5.2 billion of existing convertible notes and Renesas’ existing loan for $500 million of new notes and 95% of the new common equity, subject to dilution from other equity issuances, with Renesas loan claims entitled to additional incremental consideration to the extent certain regulatory approvals are not obtained by an agreed upon deadline.
• Pursuant to the transactions, existing equity will be cancelled, and the existing equity holders will receive their pro rata share of 3% or 5% of new common equity, subject to dilution from other equity issuances and potential reduction from certain events.
• All other unsecured creditors are expected to be paid in the ordinary course of business.

To implement the transactions envisioned by the RSA, the Company intends to solicit approval of the pre- packaged plan of reorganization and then file voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the near future. Wolfspeed expects to move through this process expeditiously and emerge by the end of third quarter calendar year 2025.

Wolfspeed is continuing to operate and serve customers with leading silicon carbide materials and devices throughout the process. The Company plans to continue to pay vendors in the ordinary course of business for goods and services delivered throughout the restructuring process via an All-Trade Motion. Vendors are expected to be unimpaired in the process. Wolfspeed also intends to file customary motions with the Bankruptcy Court to support ordinary-course operations including, but not limited to, continuing employee compensation and benefits programs.

Additional details regarding the RSA will be provided in the Company’s Form 8-K to be filed with the U.S. Securities and Exchange Commission (the “SEC”). This press release does not constitute an offer to sell or purchase any securities, which would be made only pursuant to definitive documents and an applicable exemption from the Securities Act of 1933, as amended. This press release does not constitute a solicitation to vote on the bankruptcy plan.

For additional information regarding the restructuring, please visit Wolfspeed’s dedicated microsite at wolfspeedforward.com.

Original – Wolfspeed