Spirit Airlines Reports Accelerated Debt Due to Chapter 11 Filing in Nigeria

Spirit Airlines recently reported an event of default under its financial obligations due to its voluntary Chapter 11 bankruptcy proceedings, as per an SEC filing. This results in the acceleration of the maturity of its debts. The company, with a market capitalization of $448 million and total debt of $579.7 million, shared this information in a recent Form 8-K filed with the SEC. According to data from InvestingPro, Spirit has a current ratio of 1.3, indicating its short-term liquidity position before the filing.

The default stems from the Chapter 11 cases filed on Monday, leading to the acceleration of its 8.00% Senior Secured Notes due in 2025. Despite these challenges, InvestingPro’s analysis shows that the company has an Altman Z-Score of 5.56 and generated $273.6 million in EBITDA in the last year. The Indenture, dated September 17, 2020, and as amended, specifies that principal and interest are now immediately due and payable. However, any enforcement actions are paused under the bankruptcy code.

The bankruptcy filing took place on November 25, 2024, in the Southern District of New York, within the framework of Spirit’s previously announced chapter 11 reorganization efforts.

Regarding the company’s stock, Spirit Airlines was informed on November 18, 2024, that the NYSE Regulation plans to delist its common stock. Following this, trading was suspended on the NYSE and the stock began trading on the OTC Pink Market under the symbol “SAVEQ” starting November 19, 2024. For a comprehensive analysis of distressed companies and their potential recovery prospects, investors can access detailed financial health metrics through InvestingPro, offering real-time data and expert insights.

In more recent updates, Spirit Airlines has obtained approval from bondholders for amendments related to its 8.00% Senior Secured Notes due in 2025. These amendments aim to eliminate certain bankruptcy remote provisions and include modifications to various agreements. This development follows the airline’s notification of its impending delisting from the NYSE due to its voluntary reorganization under bankruptcy law.

Spirit Airlines has now shifted its stock trading to the OTC Pink Market following the delisting. The airline ensures that its business operations remain intact. However, caution is advised to current and potential stockholders regarding the potentially less liquid market for the stock on the OTC Pink Market, which could impact trading prices.

These recent developments occur amidst Spirit Airlines’ Chapter 11 bankruptcy proceedings. The airline has not signaled intentions to appeal the NYSE’s delisting decision but has warned investors about the speculative nature of trading its common stock during the Chapter 11 process. It’s important to note that trading prices during this period may not accurately reflect the actual recovery for common stockholders.

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