Struggling US budget carrier Spirit Airlines has filed for a pre-arranged Chapter 11 restructuring process, from which it hopes to emerge in the first quarter of next year having already secured investment commitments from existing bondholders.
Spirit says it will continue to operate as normal during what it calls a “streamlined” Chapter 11 process.
The airline’s chief executive Ted Christie says: ”I am pleased we have reached an agreement with a supermajority of both our loyalty and convertible bondholders on a comprehensive recapitalisation of the company, which is a strong vote of confidence in Spirit and our long-term plan.
”This set of transactions will materially strengthen our balance sheet and position Spirit for the future while we continue executing on our strategic initiatives to transform our guest experience.”
Spirit has secured backstopped commitments for a $350 million equity investment from existing bondholders and will complete a deleveraging transaction to equitise $795 million of funded debt.
Bondholders are also providing $300 million in debtor-in-possession financing, which, together with Spirit’s available cash reserves and cash provided by operations, is expected to further support the company through its formal restructuring.
“The company has received support from a supermajority of its loyalty and convertible bondholders and expects to emerge from a streamlined Chapter 11 process in the first quarter of 2025,” Spirit says.
