Spirit Airlines has been granted approval for its debt restructuring plan by Judge Sean Lean of the Bankruptcy Court in White Plains, New York.
The Florida-based carrier plans to convert $795 million of debt to equity to exit Chapter 11, which it entered last November.
Spirit’s proposal also includes injecting $350 million through equity issuance and issuing $840 million in aggregate principal amount of new debt.
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It also plans to take out $300 million in revolving credit financing. The company aims to emerge from bankruptcy by the end of the quarter.
“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,” said Ted Christie, the airline’s CEO.
Frontier Airlines’ new proposal rejected
The approval of the plan comes days after Spirit rejected a new merger proposal from Frontier Airlines, another U.S. low-cost carrier that is struggling financially.
The two companies have resumed talks about a potential merger in late 2024, but Frontier’s proposals have not appealed to Spirit’s management.
Spirit Airlines currently has a fleet of 194 Airbus aircraft, including 142 A320s and 52 A321s.
