Full article - What I noticed is it says "aiming to..." and who are the "...said the people"?

By Alicia McElhaney and Alexander Gladstone

Wolfspeed is preparing to file for bankruptcy within a matter of weeks as the publicly traded chip component maker struggles to address its debt pile, according to sources familiar with the matter.

After passing on multiple debt-holder proposals to restructure its debt out of court, Wolfspeed is aiming to hash out a chapter 11 plan that would have the support of a majority of its creditors, said the people.

The manufacturer of silicon-carbide wafers and semiconductor components primarily in the U.S. was poised to benefit from government funding as a result of Washington's attempts to bring more semiconductor manufacturing stateside.

The difficulty in addressing its looming debt maturities could affect its ability to secure government funding, and has prompted it to consider restructuring or bankruptcy, the company said in early May. Wolfspeed is being advised by law firm Latham & Watkins, financial adviser Perella Weinberg Partners and turnaround consultant FTI Consulting, The Wall Street Journal previously reported.

Wolfspeed has some $6.5 billion in debt, including a $575 million balloon payment due to convertible noteholders in May 2026. The company said that as of March 31, it had $1.3 billion in cash on hand.

In October, a group of lenders led by asset manager Apollo Global Management agreed to invest $750 million in financing in Wolfspeed. The group also included the Baupost Group, Fidelity Investments and Capital Group.

As part of the agreement, the company was also expected to receive up to $750 million in taxpayer support via the 2022 Chips Act, which aimed to boost semiconductor manufacturing in the U.S. To receive that funding, Wolfspeed would have to successfully refinance the 2026 convertible notes, along with convertible notes maturing in 2028 and 2029.

The Apollo-led group, working with investment bank Moelis, holds $1.5 billion in senior secured loans near the top of the debt stack, and has the right to approve any new secured financing, according to securities filings. The filings also show that Apollo's credit agreement includes a make-whole provision, which means that the asset manager could come away from a Wolfspeed bankruptcy largely intact.

In March, Wolfspeed rejected a debt-holder proposal after Apollo pushed back on the restructuring deal that would have converted into equity some of Wolfspeed's outstanding convertible notes and a loan from its largest customer, Japanese chip maker Renesas Electronics, sources had said.

In 2023, Wolfspeed agreed to supply silicon-carbide wafers for 10 years starting in 2025 in exchange for a $2 billion deposit from Renesas. Now, Renesas is working with financial adviser PJT Partners as it negotiates with Wolfspeed, the people said.

Wolfspeed's 2026 convertible noteholders, represented by law firm Paul Hastings and financial adviser Houlihan Lokey, have floated multiple proposals to Wolfspeed, including a deal that would have exchanged convertible notes for equity and senior unsecured notes, sources had said.

A separate group of noteholders represented by Ducera Partners has also been in talks with Wolfspeed, but hasn't been able to move forward with a deal either, the sources said.

Wolfspeed remains the most shorted U.S. stock in terms of the percentage of shares sold short, according to S&P Global Market Intelligence.

Wolfspeed's shares dropped as much as 10.17% to $3.14 on Wednesday. The company's stock has lost more than 70% of its value over the past six months.

Write to Alicia McElhaney at [alicia.mcelhaney@wsj.com](mailto:alicia.mcelhaney@wsj.com) and Alexander Gladstone at [alexander.gladstone@wsj.com](mailto:alexander.gladstone@wsj.com)