Investing.com -- Shares of Wolfspeed Inc (NYSE:WOLF) jumped over 14% in afternoon trading Tuesday following reports that private equity firm Apollo Global Management (NYSE:APO) has hired investment bank Moelis (NYSE:MC) to advise on a potential debt restructuring with the struggling semiconductor company, Wall Street Journal Pro reported citing people familiar with the matter.
Apollo sits near the top of Wolfspeed’s approximately $6.5 billion debt structure, leading a group that holds $1.5 billion in senior secured loans and possesses the authority to approve any new secured financing, according to securities filings.
With earnings last week, the company disclosed it failed to restructure its 2026 convertible notes, and is now pursuing “in-court and out-of-court” strategies. The company also didn’t provide fourth-quarter guidance and issued a “going concern” warning.
In addition to the debt issues, the company highlighted continued headwinds for Silicon Carbide (SiC) products.
However, analysts have stated that fundamentals are secondary to debt issues. The company must restructure the convertible notes to access the CHIPS Act money.