Spirit Airlines (OTC:SAVEQ) Inc. (NYSE:SAVE), currently trading at $0.34 per share with a market capitalization of $448 million, announced on Monday that it has commenced a $350 million equity rights offering, as part of its ongoing efforts to restructure under Chapter 11 bankruptcy.
The offering, which will run until 5pm EST on January 30, 2025, comes after the airline and its subsidiaries filed for bankruptcy on November 18, 2024. According to InvestingPro data, the company maintains a Financial Health Score of 2.53, rated as "GOOD" despite its current challenges.
The rights offering is part of a pre-arranged plan of reorganization, which was agreed upon with certain stakeholders. The plan is currently under review in the United States Bankruptcy Court for the Southern District of New York, where Spirit’s Chapter 11 cases are being administered. The airline’s financial position shows total debt of $580 million and a current ratio of 1.3, based on the latest available data.
In conjunction with this announcement, Spirit also filed its monthly operating report for November 2024 with the Bankruptcy Court. The report is a requirement of the bankruptcy process and is not intended to be used for investment decisions. It has not been audited or reviewed by independent accountants and is subject to change.
This move follows the delisting of Spirit’s common stock from the New York Stock Exchange on December 5, 2024, with the stock now trading on the OTC Pink Market under the symbol "SAVEQ." The delisting occurred ten days after the NYSE filed a Form 25, and the deregistration of the common stock will be effective 90 days after the filing.
The airline has warned that the proposed reorganization plan indicates that holders of Spirit’s equity securities are not expected to receive any recovery of value from their investment. The forward-looking statements in this report are subject to risks and uncertainties, including the impact of bankruptcy proceedings and the ability to complete the equity rights offering.
Recent financial data from InvestingPro shows revenue of $215 million with a concerning year-over-year decline of 14%, highlighting the company’s operational challenges. For deeper insights into distressed companies and investment opportunities, investors can access comprehensive financial analysis tools and expert recommendations through InvestingPro’s advanced screening platform.
The information in this article is based on a press release statement and filings with the SEC.
In other recent news, Spirit Airlines is navigating significant developments. The company has reported an event of default under its financial obligations due to its voluntary Chapter 11 bankruptcy proceedings, which has resulted in the acceleration of its debts. Despite the challenging situation, Spirit maintained an Altman Z-Score of 5.56 and generated EBITDA of $273.6 million in the last twelve months, according to an analysis by InvestingPro.
Simultaneously, Spirit Airlines has successfully secured bondholder consent for amendments related to its 8.00% Senior Secured Notes due in 2025. This development follows the airline’s notification of its impending delisting from the New York Stock Exchange due to the voluntary reorganization under bankruptcy law.
Furthermore, Spirit Airlines has transitioned to the OTC Pink Market for its stock trading following the delisting. The airline assures that its business operations will remain unaffected, although it has warned current and potential stockholders about the possibility of a less liquid market for its stock on the OTC Pink Market.
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