Spirit Airlines (OTC:SAVEQ), Inc. (NYSE:SAVE) has successfully received consent from its bondholders to amend provisions related to its 8.00% Senior Secured Notes due in 2025, as disclosed in a recent SEC filing. On Monday, the airline announced that 94.56% of the total principal amount of the notes had approved the proposed changes, surpassing the threshold required for the amendments to take effect.
The amendments, which were proposed on November 19, 2024, aim to eliminate certain bankruptcy remote provisions from the indenture and related agreements governing the notes. The changes include modifications to the Indenture dated September 17, 2020, the Collateral Agency and Accounts Agreement, and the Security Agreement, all of which were established between Spirit Airlines and various co-issuers, guarantors, and Wilmington Trust, National Association as trustee and collateral custodian.
The consent solicitation expired at 5:00 p.m. New York City time on the previous day, November 25, 2024. Following the receipt of the necessary consents, Spirit Airlines entered into a second supplemental indenture and amendments to the collateral agency and accounts agreement and the security agreement on the same day.
This move comes after Spirit Airlines was notified on November 18, 2024, that its common stock would be delisted from the New York Stock Exchange and that trading would be suspended immediately. The delisting was to become effective ten days after the filing of the Form 25 by NYSE Regulation. The common stock began trading on the OTC Pink Market on November 19, 2024, under the ticker "SAVEQ."
The information in this article is based on a press release statement and the SEC filing by Spirit Airlines. The airline has cautioned that the forward-looking statements in the filing are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. These include risks associated with the bankruptcy process, the impact of litigation, regulatory proceedings, and other factors detailed in the company's SEC filings.
Spirit Airlines, based in Dania Beach, Florida, is incorporated in Delaware and operates in the scheduled air transportation industry under the SIC code 4512. The fiscal year for the company ends on December 31.
In other recent news, Spirit Airlines, Inc. has been notified of its impending delisting from the New York Stock Exchange (NYSE), following its filing for Chapter 11 bankruptcy. The airline's common stock was promptly suspended and is set to commence trading on the OTC Pink Market. The NYSE Regulation cited the airline's voluntary reorganization under bankruptcy law as the reason for its unsuitability for continued listing.
The transition to the OTC market, according to Spirit Airlines, will not affect its business operations. However, the airline has cautioned current and potential stockholders about the possibility of a less liquid market for its stock on the OTC Pink Market, which could negatively impact the trading price.
Furthermore, investors have been warned about the speculative nature of trading in the company's common stock during the Chapter 11 proceedings. The company's 8-K filing contains forward-looking statements cautioning that trading prices may not reflect the actual recovery, if any, for the holders of the common stock in the bankruptcy process. Lastly, Spirit Airlines has not expressed any plans to appeal the NYSE's delisting decision. These developments are part of the airline's recent news.
InvestingPro Insights
As Spirit Airlines navigates through its financial challenges, InvestingPro data provides additional context to the company's current situation. Despite the recent delisting from the NYSE, Spirit Airlines maintains a market capitalization of $448.02 million. The company's revenue for the last twelve months as of Q2 2024 stands at $215.24 million, with a revenue growth of -14.04% over the same period, reflecting the ongoing difficulties in the airline industry.
InvestingPro Tips highlight some potential areas of concern and opportunity for investors:
1. Spirit Airlines has high debt levels, which aligns with the recent bondholder consent solicitation to amend provisions related to its notes.
2. The company's earnings quality is low, with a significant difference between reported earnings and free cash flow, which may explain the need for financial restructuring.
These insights are particularly relevant given the context of Spirit's recent delisting and the amendments to its bond provisions. Investors considering Spirit Airlines should be aware that InvestingPro offers 13 additional tips for a more comprehensive analysis of the company's financial health and prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.