Spirit to Start Tapping $475 Million in New Bankruptcy Financing
(Bloomberg) — Spirit Aviation Holdings Inc. got permission from bankruptcy court to begin raising $475 million in new financing and execute an agreement with its largest aircraft lessor to return dozens of planes.
Both the new financing and the lessor, AerCap Ireland Ltd., Spirit’s lawyer, Marshall Huebner, said during a hearing in New York on Friday. The agreement with Spirit stands to unlock more than $600 million in new liquidity to fund its operations as it restructures in Chapter 11, the company said. Additional deals with other aircraft lessors that would make the bankrupt carrier more money should be finalized in the coming days, Spirit attorney Marshall Huebner said during a hearing in New York on Friday.
The new financing is being provided by a group of senior Spirit lenders that supported the company through its first trip to Chapter 11, which ended earlier this year. Lenders include Citadel, Cyrus Capital Partners and Pacific Investment Management Co., according to a statement made in September. It is located.
Judge Sean Lane, who is overseeing the bankruptcy, said Friday that he would give Spirit tentative approval for Chapter 11 financing, which would allow the company to immediately draw $200 million. Spirit will then ask for confirmation to withdraw the remaining amount, as is customary. The financing involves a roughly $856 million rollup of existing senior notes that pushes those obligations to the top of the repayment pipeline, according to court documents.
Additionally, Spirit will save money under its agreement with Aercap. According to the agreement, Aercap will pay $150 million to the bankrupt airline. In return, Spirit will return the 27 planes it leased, according to court documents. Spirit said the deal would reduce operating costs by “hundreds of millions of dollars.”
The company filed Chapter 11 in August, less than a year after emerging from an earlier bankruptcy that cut its debts but did not cover Spirit’s operating expenses.
The case is Spirit Aviation Holdings, Inc., 25-11897, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
–With help from Mary Schlangenstein.
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