Spirit Airlines, Inc. received court approval for a $795 million funded debt equitizing plan on February 20, which the company expects to alleviate its Chapter 11 bankruptcy.?

After struggling to recover following the pandemic and a failed merger with JetBlue that was blocked by the federal government citing anti-competitive concerns, Spirit became the first to declare Chapter 11 bankruptcy since American Airlines in 2011.?

It reported around $3.3 billion in debt and laid off several hundred pilots in a money-saving effort. While it¡¯s been trimming pilots and unpopular routes, the airline¡¯s day-to-day operations have not changed.?

The airline also saw a 90 percent drop in stock price last year, with a 50-point drop happening over a matter of just days last November ahead of the bankruptcy filing. The consequential bankruptcy filing means the airline¡¯s been dropped from the New York Stock Exchange.?

The United States Bankruptcy Court for the Southern District of New York approved the plan, which equitizes ¡°$795 million of funded debt, receive $350 million in new equity investment and issue $840 million aggregate principal amount of new senior secured debt to existing bondholders upon emergence.¡±?

Following its declaration of bankruptcy, another low-cost air carrier offered to acquire Spirit: Frontier Airlines. The airline sent several proposals offering to acquire the airline, but the airline rejected each one, most recently one that would acquire Spirit for about $2.16 billion. When it countered with a different proposal, Frontier rejected it. The acquisition will not go forward.?

"Today's approval is a major milestone as we progress toward the successful conclusion of our in-court process," said Ted Christie, Spirit's President and Chief Executive Officer. "We will emerge as a stronger airline with the financial flexibility to continue providing Guests with enhanced travel experiences and greater value. Throughout this process, we've had virtually unanimous support from our bondholders, who recognize Spirit's value and potential.?

¡°As we move forward, our leadership team remains focused on reducing costs while also advancing our strategic initiatives to transform our Guest experience and position Spirit for success." Mr. Christie continued, "I'm especially grateful for the dedication and unwavering commitment of our entire Spirit Family, who continue their outstanding work to serve our Guests and drive our business forward."?

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