One of Wolfspeed’s largest creditors will own a 39% stake in the Durham-based chipmaker, pending regulatory approval, including from the Committee on Foreign Investment in the United States.
The Durham-based chipmaker issued a warrant to Renesas Electronics America, a subsidiary of Tokyo-based semiconductor manufacturer Renesas Electronics, according to a Securities and Exchange Commision report filed Tuesday. The warrant allows Renesas to purchase more than 4.9 million shares of Wolfspeed’s stock at an exercise price of $23.95, or more than $118.4 million. That warrant is exercisable within four years.
Wolfspeed emerged from bankruptcy on Monday and its stock traded sharply higher. But as part of the restructuring, Wolfspeed canceled its old shares and issued new ones.
Wolfspeed had a new float of about 25.8 million shares, compared with 156.4 million shares for the old listing.
For example, 5,000 shares at Friday’s close of $1.21 would have been valued at $6,050. With the new float, those 5,000 old shares would have been converted into 42 new ones, according to a Wolfspeed official. Wolfspeed opened Monday at $18, leaving the 42 shares with a value of $928, marking a reduction of $5,122, or 85%.
Wolfspeed shares closed Tuesday at $28.77, marking a 30% gain on the day.
While Wolfspeed will now be incorporated in Delaware, it expects to keep its headquarters in Durham.
It is building a $5 billion manufacturing plant near Siler City, aided by federal subsidies approved during the Biden administration. Plans called for 1,800 employees by 2030. The goal was to promote U.S. chip manufacturing, but the Trump administration has criticized many such projects originating during President Joe Biden’s term.
Wolfspeed was formerly called Cree, which was founded in 1987 by some NC State graduate students. It was long known for its light-emitting diode (LED) technology. Former CEO Gregg Lowe, a longtime Texas Instruments executive, joined the business in 2017, and he led a restructuring that split off the chip and lighting businesses.
Lowe was fired in November as the company struggled. At the time, shares were trading for around $6.70. Wolfspeed shares bottomed at 39 cents after the company announced it would file for bankruptcy in July.
AloJapan.com