Spirit Airlines Secures Court Approval for $795 Million Debt Restructuring
Spirit Airlines has received court approval to move forward with a $795 million debt restructuring plan, allowing the budget carrier to convert debt into equity and transition into a privately owned company.
On Thursday, U.S. Bankruptcy Judge Sean Lane approved the airline’s restructuring proposal in a hearing held in White Plains, New York. Under the plan, existing shareholders will lose their equity stakes, while ownership will be transferred to Spirit’s lenders, including investment funds managed by Pacific Investment Management Company, UBS Asset Management, and Citadel Advisors.
The airline also plans to raise an additional $350 million through the sale of new equity shares, positioning itself for financial stability. Spirit expects to complete the restructuring and exit bankruptcy by the first quarter of 2025.
“We will emerge as a stronger airline with the financial flexibility to continue providing guests with enhanced travel experiences and greater value,” said Spirit Airlines CEO Ted Christie in a statement.
Spirit previously rejected an acquisition proposal from Frontier Group, arguing that the bankruptcy restructuring provided better value for creditors. The airline cited financial risks and potential regulatory hurdles as reasons for declining Frontier’s offer, which would have allowed Spirit to retain a 19% ownership stake.
Judge Lane also stated he would issue a written ruling addressing concerns raised by the U.S. Securities and Exchange Commission (SEC) and the U.S. Trustee’s Office. The agencies objected to Spirit’s handling of shareholder and creditor claims, particularly its approach to obtaining consent for the restructuring plan. Despite these objections, the court’s approval paves the way for Spirit to complete its financial overhaul.
