Spirit Airlines Files For Bankruptcy Protection; Stock Up In Pre-market

Spirit Airlines

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(RTTNews) - Spirit Airlines, Inc. (SAVE) announced that it has filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York. The company expects to complete this process in the first quarter of 2025.

In the pre-market activity on the NYSE, Spirit shares were gaining around 4 percent to trade at $1.12.

The company has entered into a restructuring support agreement or RSA supported by a supermajority of Spirit's loyalty and convertible bondholders on the terms of a comprehensive balance sheet restructuring.

The restructuring is expected to reduce Spirit's debt and provide increased financial flexibility.

Spirit has received backstopped commitments for a $350 million equity investment from existing bondholders. It will complete a deleveraging transaction to equitize $795 million of funded debt.

In addition, existing bondholders are providing $300 million in debtor-in-possession or DIP financing. This, together with Spirit's available cash reserves and cash provided by operations, is expected to further support the company through the chapter 11 process.

Throughout the prearranged, streamlined chapter 11 process, Spirit expects to continue operating its business in the normal course.

As a result of the chapter 11 filing, the company expects to be delisted from the New York Stock Exchange in the near term.