Spirit Airlines, a low-fare airline, has provided an update on its restructuring process, including a new proposal from Frontier Group Holdings. On February 4, 2025, Frontier submitted a proposal offering Spirit stakeholders $400 million in second-lien debt and a 19 percent equity stake in the combined company. However, Spirit’s Management and Board, after consulting legal and financial advisors, determined that the offer posed material risks, including lower value for stakeholders and regulatory uncertainties. Spirit responded with a counterproposal on February 7, valuing debt and equity at $1.785 billion, but Frontier rejected it on February 10, 2025, and reaffirmed its original proposal.
Spirit continues to move forward with its restructuring, which is designed to significantly reduce its debt and ensure long-term success. A court hearing for the confirmation of its reorganization plan was scheduled for February 13, 2025, with nearly all creditors voting in favor. Spirit expects to finalize the restructuring process by the first quarter of 2025. The company is being advised by Davis Polk & Wardwell, Alvarez & Marsal, and Perella Weinberg Partners.
