Frontier Group Holdings announced a renewed proposal to merge with Spirit Airlines, which would involve issuing $400m in debt and granting 19pc of Frontier’s ordinary equity to Spirit’s creditors.
The estimated total value of the merger offer is between USD2.16bn and USD2.9bn, potentially making the combined airline the fifth-largest in the US, carrying approximately 100m passengers.
Spirit Airlines management, including CEO Ted Christie and Chairman Mac Gardner, raised concerns regarding the reduced terms of the proposal compared to a previous agreement and highlighted the inadequacies for the airline currently in Chapter 11 bankruptcy.
Amid ongoing discussions, Spirit’s board has decided to move forward with its independent Chapter 11 reorganisation plan, as Frontier believes this will leave Spirit highly leveraged and unprofitable.
