Spirit Airlines (SAVE.US) has filed for bankruptcy protection after years of losses.
1min read Low-cost airline Spirit Airlines (SAVE.US) has filed for bankruptcy protection after years of losses.
The company has initiated a voluntary bankruptcy process, and most bondholders have signed a debt restructuring agreement.
Spirit Airlines has received support commitments for a $350 million equity investment and $300 million debtor-in-possession financing arrangement from existing bondholders.
As part of the arrangement, Spirit Airlines will complete a deleveraging transaction to convert $795 million of financing debt.
The DIP financing, as well as existing cash from reserves and operations, is expected to support Spirit's continued operations through the Chapter 11 process. Spirit expects its business to continue as normal.
The airline expects to complete its Chapter 11 bankruptcy process in the first quarter of 2025.
At this time, the company expects to delist from the New York Stock Exchange in the near future. As part of the Spirit restructuring, these shares are expected to be cancelled and have no value.
Spirit Airlines' own woes include engine recalls leading to grounded planes, increased costs post-pandemic, and a failed merger with Jetblue Airways (JBLU.US) due to antitrust issues. Spirit Airlines' stock has fallen nearly 94% since the beginning of 2024.
Spirit Airlines rose 2.78% before the US markets opened on Monday to $1.11.