Spirit Airlines has secured approval from the US Bankruptcy Court for the Southern District of New York to access up to $475m in debtor-in-possession (DIP) financing.
Its parent company, Spirit Aviation Holdings, stated that the court authorised the airline to draw an initial $200m from the multi-tranche facility, which comes from existing bondholders.
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The company said this financing will support Spirit’s operations during its Chapter 11 restructuring.
In parallel, the court approved an agreement between Spirit and AerCap Ireland, its largest aircraft lessor.
Under this agreement, AerCap will pay $150m to Spirit.
The terms provide for the rejection of 27 aircraft leases while settling all outstanding claims and disputes between Spirit and AerCap.
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By GlobalDataThe company indicated that the agreement would lower operating costs and includes provisions for the delivery of 30 aircraft in the future.
Spirit is continuing to negotiate with other lessors as it pursues fleet optimisation, the parent company revealed.
Spirit president and CEO Dave Davis said: “We are pleased to have reached another significant milestone in our restructuring, which represents continued progress toward securing a successful future for Spirit.
“With these approvals in place, we are better equipped to build a stronger airline that delivers unmatched value to American consumers. We thank our stakeholders for their support and the Spirit team for their dedication and resilience during this process.”
Legal and financial advisers on the restructuring include Davis Polk & Wardwell, Debevoise & Plimpton, FTI Consulting, and PJT Partners.
Spirit operates an Airbus-only fleet and covers routes throughout the US, Latin America, and the Caribbean.
In 2022, Frontier Group Holdings, a budget airline, offered to acquire Spirit with the aim of creating the fifth-largest airline in the US. However, Spirit rejected the bid, saying it was less favourable to shareholders than its own reorganisation plan.
