Spirit to Exit Bankruptcy in Coming Weeks
The United States Bankruptcy Court for the Southern District of New York approved Spirit Airlines’ debt restructuring on Thursday, paving the way for the low-cost carrier to convert $795 million in debt to equity and emerge from bankruptcy as a private company in the coming weeks.
U.S. Bankruptcy Judge Sean Lane approved Spirit’s bankruptcy plan which cancels existing equity shares and hands ownership to Spirit’s lenders, which include investment funds managed by Pacific Investment Management Company, UBS Asset Management and Citadel Advisors.
Under the approved plan, Spirit will equitize $795 million of funded debt, receive $350 million of new equity investment and issue $840 million aggregate principal amount of new senior secured debt to existing bondholders upon emergence. In addition, Spirit will enter into a new revolving credit facility of up to $300 million. Spirit vendors, aircraft lessors and holders of secured aircraft indebtedness will not be impaired.
Spirit recently rejected a proposed acquisition by Frontier Group, saying the proposed buyout offered less value for Spirit’s creditors than the bankruptcy deal.
Additional information about the Company’s chapter 11 case, including access to Court filings and other documents related to the restructuring process, is available at https://dm.epiq11.com/SpiritGoForward.
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