Spirit Airlines shares jump 46% on extension to debt refinancing deadline
21/10/2024 16:04
Oct 21 (Reuters) - Shares of Spirit Airlines SAVE.N
surged as much as 46% on Monday after the ultra low-cost carrier
reached a deal with its credit card processor to extend a debt
refinancing deadline by two months until Dec. 23.
The agreement with U.S. Bank National Association provides
some elbow room to Spirit to refinance its $1.1 billion loyalty
bonds due to mature next year. The previous refinancing deadline
was Oct. 21.
The Florida-based company said on Friday it had fully drawn
down its $300 million revolving credit facility and expects to
end this year with over $1 billion in liquidity.
"Spirit has to address debt payment timing and resizing the
fixed cost structure, and it is still unclear if this can be
completed with/without Chapter 11," said Savanthi Syth, analyst
at Raymond James.
Spirit, which has failed to report a profit in the last five
out of six quarters, unveiled plans to tap into premium travel
in July to mitigate cost pressures and boost earnings. This
marked a major shift away from its no-frills, ultra-low cost
model.
Shares of Spirit have fallen about 91% this year, while the
S&P 500 passenger airlines index .SPLRCALI jumped 33%.
(Reporting by Aishwarya Jain in Bengaluru; Editing by Arun
Koyyur)
((Aishwarya.Jain@thomsonreuters.com;))