Spirit Airlines’ stock surged over 60% in pre-market trading after it revealed it had borrowed the entire amount of its $300 million revolving credit facility in a stock filing published on October 18, 2024.
The facility matures on September 30, 2026 – provided its senior secured notes due 2025 are not extended or refinanced by June 2025 or its convertible senior notes due 2026 are not extended or refinanced by February 2026.
Market rumours circulating within the industry have speculated the company to file for Chapter 11 today.
By the year end, the company expects to have over $1bn in liquidity, including unrestricted cash and cash equivalents, short-term investment securities and additional liquidity initiatives. This is assuming, Spirit said, that it is able to close these ongoing initiatives.
One such initiative includes an agreement to extend its existing card processing agreement from October 21, 2024, to December 23, 2024. The early maturity date was pushed back from the final day of the year to March 3, 2025. The agreement was made on October 11, 2024.
The airline has been navigating a tough financial landscape – particularly after its failed merger with JetBlue earlier in the year. It has posted consecutive quarterly net losses for the past several quarters. It reported a significant net loss of $192.9 million in its second quarter 2024 results – citing “weak revenues” as a key driver for its losses.
The company’s stock levelled to being up 30% in pre-market trading as the day progressed as of 11:46 BST.