1053 ET - Spirit Airlines' agreement on a comprehensive balance-sheet restructuring supported by a supermajority of its bondholders comes as it struggles to survive intense competition from larger airlines for value-minded fliers. Raymond James believes the bankruptcy process is likely to move quickly because of the focus on the balance sheet. In a note, the investment bank says existing bondholders will provide Spirit with $300M in debtor-in-possession financing, agree to equitize $795M of funded debt, and backstop commitments for a $350M equity investment exiting the restructuring. Analyst Savanthi Syth says current equity holders will be wiped out and the stock will be delisted. "Beyond the balance sheet restructuring, the path to profitability is expected to be supported by already announced product and network changes and target of reducing $80 million in annual costs," says the analyst. (denny.jacob@wsj.com; @pennedbyden)
(END) Dow Jones Newswires
November 18, 2024 10:53 ET (15:53 GMT)
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