Spirit Airlines has received backing from a supermajority of its bondholders when, as expected, it filed for voluntary prearranged Chapter 11 restructuring, securing a total of $650m in financing for its restructuring efforts.
The airline emphasized that this Chapter 11 process will not affect its ongoing operations, employee payments, or payments to vendors, as it aims to restructure amidst significant debt levels exceeding $8.99bn.
Spirit expects to be delisted from the New York Stock Exchange, with its common stock later trading in the over-the-counter marketplace, as the restructuring involves the cancellation of its shares due to financial restructuring.
The plan to restructure, involving discussions with various creditors and due approvals by the United States Bankruptcy Court, is anticipated to lead to Spirit’s emergence from Chapter 11 in the first quarter of 2025, addressing ongoing challenges related to looming bond maturities and financial losses reported in early 2024.
The company’s largest unsecured creditors are:
- Holders of 1pc convertible notes issued in 2021 and due in 2026, worth $500m;
- International Aero Engines holding $42.7m in trade payables;
- Lufthansa Technik holding $16.1m in trade payables.
- the holders of 4.75pc convertible notes issued in 2020 and due in 2025, worth $25.1m; and
- US Department of Treasury in relation to an unsecured loan worth $136m;
