Spirit Airlines has rejected a third attempt at acquiring by rival Frontier Airlines and will instead proceed with its own capitalisation effort, which is expected to be completed by March.
Frontier's Parent Frontier Group submitted a revised proposal to Spirit on February 4th. Under the proposal, the latter stakeholders will receive $400 million in second Ryan debt issued by Frontier and 19% of the shares after the Common Stock of Frontier.
A previous proposal rejected by Spirit in late January would have required Spirit's memo holder to invest $350 million in stock and pay a $35 million backstop fee as part of the transaction.
According to Spirit, the latest proposal from the Frontier will be “less value” compared to its standalone restructuring efforts, and “an expanded, more costly, Chapter 11 procedures.”
Frontier is not yet ready for the latest developments. It had progressed with contracts to win spirits, but fell in 2022 when JetBlue Airways made a high offer to operators. The JetBlue deal was halted in 2024 after a federal judge ruled it against it on reasons of competition and then filed for Chapter 11 bankruptcy.
“The spirit goes on quickly and we will continue to carry on the restructuring process and conclude.
A court hearing to consider approval of the Spirit's reorganization plan is scheduled to take place on February 13th.
