In an effort to lower its debt and rebuild the business, Spirit Airlines made it known on Monday that it had filed for Chapter 11 bankruptcy protection.
A supermajority of Spirit’s loyalty and convertible bondholders supported the inclusion of a” RS A” in a Monday press release, according to Spirit Airlines, in a comprehensive balance sheet restructuring.
According to Spirit Airlines, the reform procedure is expected to help the business decrease its debt, offer better financial versatility, and “position Spirit for long-term success and promote investments, enhancing guest experiences and increasing value,” according to the company.
The firm’s bankruptcy submitting comes after two unsuccessful mergers with JetBlue and Frontier over the past few years, which has left the low-cost flight with frequent quarterly losses, according to Fox Business. The outlet reported that Spirit made plans to sell aircraft and employ layoffs in order to raise money to support its operations in October.
Spirit Airlines ‘ assets and liabilities are currently priced between$ 1 billion and$ 10 billion, according to a court filing obtained by Fox Business.
In Monday’s press transfer, Spirit Airlines CEO Ted Christie explained that the flight had completed an arrangement with a supermajority of the company’s borrowers on a” complete reform”.
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As we continue carrying out our strategic initiatives to enhance our guest practice, which include new increased travel options, greater value, and more flexibility, as a result of this transaction, Spirit will significantly improve our balance sheet and position itself for the future,” Christie said. ” I’m incredibly proud of the Spirit player’s dedication and hard work, which are essential for our continued growth in advancing our business and satisfying our friends,” said the Spirit team.
Existing borrowers made a$ 350 million capital investment as part of the Chapter 11 debt safety contract, according to the press release on Monday. Existing lenders are also expected to deliver Spirit Airlines with$ 300 million in debtor-in-possession funding.
Spirit Airlines expressed assurance that the more funding, in addition to the airline’s recent cash reserves and continuing operations, will help the business understand the Chapter 11 bankruptcy procedure.
” Spirit expects to continue operating its business in the ordinary course throughout this prearranged, streamlined chapter 11 method”, Spirit Airlines stated. ” Friends can use all cards, funds, and loyalty points as normal” and continue to guide and fly without interruption.
