Wolfspeed Inc ( WOLF ) shares are trading higher Tuesday after the company initiated its pre-packed restructuring process, filing for Chapter 11 bankruptcy.

What Happened: Wolfspeed ( WOLF ) said it has taken the next step to implement its previously announced Restructuring Support Agreement with key lenders.

Wolfspeed ( WOLF ) expects to emerge from the process with 70% less debt, representing a reduction of approximately $4.6 billion. The company said the restructuring will help it be better positioned to focus on long-term growth and accelerate its path to profitability.

In order to implement the prepackaged plan, Wolfspeed ( WOLF ) voluntarily filed for Chapter 11 bankruptcy. The company expects to emerge from the process by the end of the third quarter of 2025.

“We are continuing to move forward with our accelerated restructuring process to strengthen our capital structure and fuel our next phase of growth,” said Robert Feurle, CEO of Wolfspeed ( WOLF ).

“With a stronger financial foundation, Wolfspeed ( WOLF ) will be better positioned to move faster on our strategic priorities and maintain our position as a global leader in the silicon carbide market. The strong support of our lenders is a testament to their belief in our business and our ability to capitalize on the opportunities ahead, driven by our exceptional, purpose-built, fully automated 200mm manufacturing footprint.”

Wolfspeed ( WOLF ) said it’s continuing to operate normally while it goes through the bankruptcy process, delivering silicon carbide materials and devices to customers. The company filed multiple customary motions with the court to support operations throughout the process. Wolfspeed ( WOLF ) expects to receive approval for the requests “shortly.”

WOLF Price Action: Wolfspeed ( WOLF ) shares were up 83.0% at approximately 72 cents at the time of publication Tuesday, according to Benzinga Pro. Wolfspeed ( WOLF ) shares are down more than 90% year-to-date.

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