Spirit Airlines , Inc. (OTC Pink: OTC:), currently valued at $448 million by market capitalization, has secured commitments for a $300 million senior secured revolving credit facility to bolster its financial position following bankruptcy proceedings. The agreement, announced today, includes a $275 million credit line and an additional uncommitted $25 million facility. According to InvestingPro analysis, the company appears slightly undervalued based on its Fair Value metrics, despite current challenges.
The new financing, provided by prepetition debtholders, will be available upon the airline’s emergence from Chapter 11 and the fulfillment of certain conditions. This credit facility is designed to support working capital and general corporate needs post-bankruptcy.
The obligations under this facility will be guaranteed by Spirit’s subsidiaries and collateralized by certain company assets, with variable interest rates tied to the Adjusted Term SOFR and Alternate Base Rate. InvestingPro data shows Spirit maintains a current ratio of 1.3 and holds an overall Financial Health score of “GOOD,” suggesting reasonable financial stability despite restructuring.
In related news, Spirit entered into a debtor-in-possession (DIP) financing agreement on December 23, 2024, with a $300 million term loan and note purchase agreement to support operations during the restructuring process. This DIP facility is secured by most of the airline’s assets and carries superpriority status, with interest payable in cash at rates based on Term SOFR or Base Rate.
Spirit’s obligations to repay the DIP facility include prepayment with proceeds from asset sales, insurance, and other extraordinary receipts. The DIP agreement is set to mature on December 23, 2025, or earlier under certain conditions such as the approval of a reorganization plan or asset sale.
Furthermore, the company announced it would publish its flight schedule for the period from May 22 through August 12, 2025, on January 31, 2025. This move signals Spirit’s forward-looking approach to operations as it navigates through the Chapter 11 process. With last twelve months EBITDA of $273.6 million, Spirit shows operational resilience. Discover more detailed financial insights and exclusive ProTips about Spirit’s recovery potential with InvestingPro.
In other recent news, Spirit Airlines has announced a $350 million equity rights offering as part of its restructuring efforts under Chapter 11 bankruptcy. The airline also reported an event of default under its financial obligations, leading to the acceleration of its debts. Despite these challenges, Spirit Airlines has secured bondholder consent for amendments related to its 8.00% Senior Secured Notes due in 2025.
These developments follow the airline’s recent delisting from the New York Stock Exchange and transition to the OTC Pink Market. Analysts from InvestingPro highlight the company’s financial health score of 2.53, despite a year-over-year revenue decline of 14% to $215 million.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
