Budget Carrier Spirit Airlines Files for Bankruptcy | Global News Avenue

Spirit Airlines (save) said on Monday it had filed for bankruptcy protection and reached a debt restructuring agreement with bondholders.

The company’s shares rose 3.7% in premarket trading, but have fallen more than 90% this year through Friday.

wall street journal have reported last week The airline is facing looming debt maturities and plans to file for Chapter 11 bankruptcy after briefly resuming merger talks with Frontier Airlines parent Frontier Group Holdings.Extra large capacitor) has collapsed.

Spirit Airlines said: “Spirit Airlines has reached an agreement with our bondholders that is expected to reduce our total debt, increase financial flexibility, position Spirit Airlines for long-term success, and accelerate investments to provide customers with a better travel experience. and greater value.” “Part of this financial restructuring includes filing a ‘pre-arranged’ Chapter 11.”

Spirit said its flights will continue normally during the bankruptcy proceedings.

Terms agreed with bondholders

Spirit said its existing bondholders have pledged “support” for a $350 million equity investment. The company said it would also “complete a deleveraging transaction to balance $795 million of financing debt.”

Spirit said it has initiated prearranged Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of New York. The airline said it will also receive $300 million in debtor-in-possession financing from existing bondholders, which, along with Spirit’s existing cash reserves, will support the company through the bankruptcy process.

Spirit said last month The company plans to cut jobs and sell some aircraft to try to shore up its finances. Trying to merge with rival JetBlue Airways (Jilin University) and Frontier Airlines have both failed in recent years, hurting Spirit’s ability to compete with larger airlines. Spirit filed Form 12b-25 with the government last week U.S. Securities and Exchange Commission (SEC)) and said it was unable to submit quarterly results.