Spirit Airlines Announces Comprehensive Agreement to Deleverage Balance Sheet and Position the Company for Long-Term Success as a Leading Low-Fare Carrier
Spirit Airlines (NYSE: SAVE) has announced a comprehensive balance sheet restructuring through a prearranged Chapter 11 process. The company has secured a restructuring support agreement (RSA) backed by a majority of bondholders, including a $350 million equity investment and $300 million in debtor-in-possession financing. The restructuring will reduce debt by $795 million through equitization. Spirit will continue normal operations, with flights, reservations, and loyalty programs unaffected. Employee wages and benefits will be maintained, and vendors will be paid as usual. The company expects to emerge from Chapter 11 in Q1 2025, though its NYSE listing will be delisted with common stock expected to have no value post-restructuring.
Spirit Airlines (NYSE: SAVE) ha annunciato una ristrutturazione completa del bilancio attraverso un processo predefinito di Chapter 11. L'azienda ha ottenuto un accordo di supporto alla ristrutturazione (RSA) sostenuto dalla maggioranza dei detentori di obbligazioni, incluso un
Spirit Airlines (NYSE: SAVE) ha anunciado una reestructuración completa de su balance a través de un proceso preestablecido de Capítulo 11. La compañía ha asegurado un acuerdo de apoyo a la reestructuración (RSA) respaldado por la mayoría de los tenedores de bonos, incluyendo una inversión de capital de $350 millones y $300 millones en financiamiento para deudores en posesión. La reestructuración reducirá la deuda en $795 millones a través de la equitización. Spirit continuará con operaciones normales, con vuelos, reservas y programas de lealtad sin verse afectados. Los salarios y beneficios de los empleados se mantendrán, y los proveedores serán pagados como de costumbre. La compañía espera salir del Capítulo 11 en el primer trimestre de 2025, aunque su cotización en NYSE será eliminada con las acciones comunes que se espera no tengan valor tras la reestructuración.
스피릿 항공(뉴욕증권거래소: SAVE)은 기초적인 챕터 11 절차를 통해 포괄적인 재무구조 조정을 발표했습니다. 이 회사는 대다수의 채권자들이 지지하는 재구성 지원 협정(RSA)을 확보했으며, 3억 5천만 달러 규모의 자본 투자와 3억 달러의 채무자 보유 금융을 포함하고 있습니다. 이번 재구성을 통해 채무는 7억 9천5백만 달러 감축될 예정이며, 이는 주식으로 전환됩니다. 스피릿 항공은 항공편, 예약 및 마일리지 프로그램에 영향을 받지 않으며 정상적인 운영을 이어갈 것입니다. 직원의 임금과 복리후생은 유지되며, 공급업체에 대한 지급은 정상적으로 이루어질 것입니다. 이 회사는 2025년 1분기 내에 챕터 11에서 벗어날 것으로 예상하지만, NYSE 상장은 취소되며 재구성 후 보통주가 가치를 가지지 않을 것으로 보입니다.
Spirit Airlines (NYSE: SAVE) a annoncé une restructuration complète de son bilan par le biais d'un processus préétabli de chapitre 11. L'entreprise a sécurisé un accord de soutien à la restructuration (RSA) soutenu par la majorité des créanciers obligataires, incluant un investissement équity de 350 millions de dollars et 300 millions de dollars de financement pour débiteurs en possession. La restructuration permettra de réduire la dette de 795 millions de dollars grâce à l'équité. Spirit continuera ses opérations normales, sans impacts sur les vols, les réservations et les programmes de fidélité. Les salaires et avantages des employés seront maintenus, et les fournisseurs seront payés comme d'habitude. L'entreprise prévoit de sortir du chapitre 11 au premier trimestre de 2025, bien que son inscription à la NYSE sera suspendue, les actions ordinaires n'ayant plus de valeur après la restructuration.
Spirit Airlines (NYSE: SAVE) hat eine umfassende Umstrukturierung der Bilanz durch ein vorab vereinbartes Verfahren nach Chapter 11 bekannt gegeben. Das Unternehmen hat eine Unterstützungsvereinbarung für die Umstrukturierung (RSA) gesichert, die von der Mehrheit der Anleiheneinhaber unterstützt wird, einschließlich einer 350 Millionen Dollar Investition und 300 Millionen Dollar an Finanzierung für Schuldner in Besitz. Die Umstrukturierung wird die Schulden um 795 Millionen Dollar durch Eigenkapitalumwandlung reduzieren. Spirit wird den normalen Betrieb fortsetzen, Flugreisen, Reservierungen und Treueprogramme bleiben unberührt. Die Löhne und Leistungen der Mitarbeiter werden aufrechterhalten, und Lieferanten werden wie gewohnt bezahlt. Das Unternehmen erwartet, im ersten Quartal 2025 aus Chapter 11 herauszukommen, obwohl die NYSE-Notierung ausgeschlossen wird und die Stammaktien nach der Umstrukturierung voraussichtlich keinen Wert mehr haben werden.
- Secured $350 million in new equity investment from bondholders
- Obtained $300 million in DIP financing
- Will reduce debt by $795 million through equitization
- Operations continue normally without service interruption
- Strong bondholder support for restructuring plan
- Filing for Chapter 11 bankruptcy protection
- Expected delisting from NYSE
- Common stock expected to be cancelled with no value
- Current shareholders likely to lose entire investment
Insights
This bankruptcy filing represents a significant strategic move for Spirit Airlines. The
Current shareholders face complete equity wipeout as shares will be cancelled through the restructuring. The company's expected delisting from NYSE and transition to over-the-counter trading signals immediate market impact. The planned Q1 2025 emergence timeline appears ambitious but achievable given the pre-arranged nature of the filing and stakeholder support.
The preservation of vendor relationships, aircraft leases and employee compensation during restructuring helps maintain operational stability, though the company's competitive position may face challenges during this period.
This restructuring reflects broader challenges in the ultra-low-cost carrier segment. Spirit's move to reorganize while maintaining normal operations demonstrates the complex balance between financial restructuring and operational continuity in the airline industry. The preservation of the loyalty program and customer credits is strategically important to maintain customer trust and future revenue streams.
The commitment to continue investing in guest experience improvements during restructuring suggests Spirit is addressing both financial and operational challenges simultaneously. However, the company will face increased scrutiny from competitors and customers during this period, potentially affecting forward bookings and pricing power in competitive markets.
Flights, Ticket Sales, Reservations and All Other Operations Continue as Normal
Restructuring Support Agreement Already Signed by a Supermajority of Spirit's Bondholders
Voluntary Prearranged Chapter 11 Proceedings Commenced to Implement the Agreed Deleveraging and Recapitalization Transactions
Receives Backstopped Commitments for
DANIA BEACH, Fla., Nov. 18, 2024 /PRNewswire/ -- Spirit Airlines, Inc. ("Spirit" or the "Company") (NYSE: SAVE) today announced that it has entered into a restructuring support agreement (the "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, provide increased financial flexibility, position Spirit for long-term success and accelerate investments providing Guests with enhanced travel experiences and greater value.
In connection with the RSA, Spirit has received backstopped commitments for a
Spirit expects to continue operating its business in the normal course throughout this prearranged, streamlined chapter 11 process. Guests can continue to book and fly without interruption and can use all tickets, credits and loyalty points as normal. The chapter 11 process itself will not impact Team Member wages or benefits, which are continuing to be paid and honored for those employed by Spirit. Vendors, aircraft lessors and holders of secured aircraft indebtedness will continue to be paid in the ordinary course and will not be impaired.
"I am pleased we have reached an agreement with a supermajority of both our loyalty and convertible bondholders on a comprehensive recapitalization of the Company, which is a strong vote of confidence in Spirit and our long-term plan," said Ted Christie, Spirit's President and Chief Executive Officer. "This set of transactions will materially strengthen our balance sheet and position Spirit for the future while we continue executing on our strategic initiatives to transform our Guest experience, providing new enhanced travel options, greater value and increased flexibility. I'm extremely proud of the Spirit team's hard work and dedication, which is key to our sustained progress in advancing our business and delivering for our Guests."
As part of the chapter 11 process, Spirit is filing a proposed Plan of Reorganization (the "Plan") that incorporates the agreed terms of the RSA and is subject to confirmation by the Court. The Company has received support from a supermajority of its loyalty and convertible bondholders and expects to emerge from a streamlined chapter 11 process in the first quarter of 2025.
In conjunction with the petition, Spirit has filed a series of first-day motions, which, once approved by the Court, will further facilitate the Company operating its business in the ordinary course during the streamlined chapter 11 process.
As a result of the chapter 11 filing, Spirit expects to be delisted from the New York Stock Exchange in the near term. The Company expects that its common stock will continue to trade in the over-the-counter marketplace through the chapter 11 process. The shares are expected to be cancelled and have no value as part of Spirit's restructuring.
Additional Information
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 or by calling Spirit's restructuring information line at (888) 863-4889 (
Advisors
Davis Polk & Wardwell LLP is serving as the Company's restructuring counsel, Alvarez & Marsal is serving as restructuring advisor, and Perella Weinberg Partners LP is acting as investment banker.
Akin Gump Strauss Hauer & Feld LLP is acting as legal counsel and Evercore is acting as financial advisor to the ad hoc group of loyalty noteholders.
Paul Hastings LLP is acting as legal counsel and Ducera Partners LLC is acting as financial advisor to the convertible bondholders.
About Spirit Airlines
Spirit Airlines (NYSE: SAVE) is a leading low-fare carrier committed to delivering the best value in the sky by offering an enhanced travel experience with flexible, affordable options. Spirit serves destinations throughout
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Cautionary Statement Regarding Forward Looking Statements
This press release contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") which are subject to the "safe harbor" created by those sections. Forward-looking statements are based on our management's beliefs and assumptions and on information currently available to our management. All statements other than statements of historical facts are "forward-looking statements" for purposes of these provisions. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "project," "predict," "potential," and similar expressions intended to identify forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding Spirit's expectations with respect to operating in the normal course, the Chapter 11 process, the DIP and potential delisting of Spirit's common stock by the New York Stock Exchange. Forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors include, among others, risks attendant to the bankruptcy process, including the Company's ability to obtain court approval from the Court with respect to motions or other requests made to the Court throughout the course of Chapter 11, including with respect the DIP; the effects of Chapter 11, including increased legal and other professional costs necessary to execute the Company's restructuring process, on the Company's liquidity (including the availability of operating capital during the pendency of Chapter 11); the effects of Chapter 11 on the interests of various constituents and financial stakeholders; the length of time that the Company will operate under Chapter 11 protection and the continued availability of operating capital during the pendency of Chapter 11; objections to the Company's restructuring process, the DIP, or other pleadings filed that could protract Chapter 11; risks associated with third-party motions in Chapter 11; Court rulings in the Chapter 11 and the outcome of Chapter 11 in general; the Company's ability to comply with the restrictions imposed by the terms and conditions of the DIP and other financing arrangements; employee attrition and the Company's ability to retain senior management and other key personnel due to the distractions and uncertainties; risks associated with the potential delisting or the suspension of trading in its common stock by the New York Stock Exchange, the impact of litigation and regulatory proceedings; and other factors discussed in the Company's Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q filed with the SEC and other factors, as described in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as supplemented in the Company's Quarterly Report on Form 10-Q for the fiscal quarters ended March 31, 2024 and June 30, 2024. Furthermore, such forward-looking statements speak only as of the date of this release. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. Risks or uncertainties (i) that are not currently known to us, (ii) that we currently deem to be immaterial, or (iii) that could apply to any company, could also materially adversely affect our business, financial condition, or future results. Additional information concerning certain factors is contained in the Company's Securities and Exchange Commission filings, including but not limited to the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.
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SOURCE Spirit Airlines, Inc.
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