# Spirit Airlines Enters into Restructuring Support Agreement and Initiates Debt Restructuring Process

Spirit Airlines, Inc., a major player in the U.S. airline industry, recently signed a Restructuring Support Agreement and filed for Chapter 11 bankruptcy with the U.S. Bankruptcy Court. The filing,dated November 18, 2024, marks a pivotal moment for the company as it navigates financial challenges.

The Restructuring Support Agreement, entered into on the same day, includes key stakeholders such as holders of Senior Secured Notes and Convertible Notes, collectively representing a significant portion of the company’s outstanding debt. This agreement lays out the framework for a pre-arranged chapter 11 process, which is intended to address the company’s financial obligations effectively.

As part of the agreement, the restructuring process involves equitization of a substantial amount of outstanding debt, totaling $410 million in Senior Secured Notes and $385 million in Convertible Notes. Additionally, a new $300 million senior secured superpriority debtor-in-possession facility has been committed by the Supporting Stakeholders. Upon emergence from Chapter 11, Reorganized Spirit is set to issue new common equity interests to its creditors, including Senior Secured Noteholders and Convertible Noteholders.

Furthermore, the Company plans to issue $840 million of senior secured notes, referred to as Exit Secured Notes, to its creditors upon reaching the Effective Date. The proceedings also include the cancellation of existing common stock and other equity interests without any distributions to holders.

The restructuring agenda laid out in the Restructuring Support Agreement is subject to Bankruptcy Court approval and the fulfillment of certain conditions. While the agreement outlines milestones for the Chapter 11 process, there is no absolute guarantee that the transactions will ultimately be finalized.

In parallel, Spirit Airlines has engaged in a Backstop Commitment Agreement with certain Backstop Commitment Parties to backstop a $350 million Equity Rights Offering, with a focus on restructuring and strengthening the company’s financial position.

These strategic maneuvers come in response to evolving market dynamics, external challenges, and the company’s internal transformation needs. By proactively addressing its financial structure, Spirit Airlines aims to emerge with a more sustainable platform for future operations.

For more information on Spirit Airlines’ ongoing restructuring process and financial updates, interested parties can access the full 8-K filing on the SEC’s website.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Spirit Airlines’s 8K filing here.

About Spirit Airlines

Spirit Airlines, Inc provides airline services. The company also offers hotels and rental cars services. It serves 93 destinations in 15 countries in the United States, Latin America, and the Caribbean. As of December 31, 2023, the company operated a fleet of 205 Airbus single-aisle aircraft. The company was formerly known as Clippert Trucking Company and changed its name to Spirit Airlines, Inc in 1992.