Spirit Airlines Gets Investment To Exit Chapter 11 Without A Merger

Spirit Airlines expects to emerge from Chapter 11 bankruptcy proceedings in the coming weeks after its plan of reorganization was confirmed by a US bankruptcy court. The airline will exit bankruptcy in a take-private deal that gives its major bondholders control of the company.
Spirit gets court approval for go-private deal
Since filing for bankruptcy in November 2024, Spirit’s future has been unclear, particularly with a merger with Frontier Airlines looming large. However, the airline looks all set to implement its independent ‘Plan of Reorganization’ after getting the go-ahead from the United States Bankruptcy Court for the Southern District of New York.
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Presiding over the case, Judge Sean Lane gave his approval to the plan following challenges from the Department of Justice’s bankruptcy watchdog, the United States Trustee Program (USTP), and the Securities and Exchange Commission (SEC).
Under its plan, the airline will pass company ownership over to its primary lenders – which include Citadel Advisors, Pacific Investment Management Company and UBS Asset Management – as well as:
Void existing equity shares
Convert $795 million of its debt into equity
Raise $350 million through new equity shares
Open a new $300 million revolving credit facility
Issue $840 million of new senior secured debt to existing bondholders
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Ted Christie, Spirit’s President and Chief Executive Officer, commented,