Irishblackbird

If they sell everything, we won't have an airline to sell. I would have started with the brand new Executive complexe and training center. Wonder if they are thinking of breaking it down into smaller chunks to sell to get a better price for the planes rather than a going out of business sale liquidation of the planes? Get a better price to return to the stake holders rather than cents on the dollar liquidation. You also would avoid the costly burden for potential buyers to have to acquire the SLI of a large labor force and massive debt. Sell planes, furlough. Wash and repeat until the Spirit stain is gone. Disclaimer. I have no business sense, so my opinion is worth a pound of sand on the beach.

coffeetoffee

https://restructuring.weil.com/pre-f...s-take-flight/

The airline isn't the assets those are just tools. Its the brand/IP/gate space/routes etc.

By selling and leasing back our assets, we may have a stronger position when negotiating with creditors when we finally file Ch11.

The value of the assets are realized at full price now under our own terms, converted to cash, and as such are then protected during CH11 reorgnization as operating capital.

This isn't Ted's first rodeo through bankruptcy.


.....


This is what I expect:

Hundreds more furloughed, soon.
We file Ch 11
We reorganize, emerging with reduced debts and perhaps some other benefits (cheaper leases)
Our future is a smaller airline (not necessarily smaller than today, but a much shallower growth profile, indefinately)
We never return to our high growth high profit past
Maybe our new strategy works well enough, combined with maybe (hopefully) industry/macro changes (things outside our control like more domestic capcity discipline/more gov $ helping consumer, etc), that we make a profit and survive.

Or, we dont, file Ch7, and either shutdown or get bought out

Basically, base case we survive but its ugly. With a decent chance we dont make it, and a wildcard chance we get bought.

redhot

Institutional investors want a merger with Frontier... I expect that to be announced sometime by the end of the year.

"We see risk in the patience of Spirit's creditors to fund an uphill marketing battle," Syth said in a note earlier this month. "We continue to think the best outcome for Spirit, creditors, and passengers would be a restructuring of obligations along with a merger with Frontier."

This comes from Savi Syth, Raymond James analyst. One of the more well known analyst in the industry. I could be wrong, but I think Indigo try's to buy them outside of bankupcy with favorable debt restructing from credditors. I firmly believe another attempt will happen in october/november. That could be why they exstended the refienacing of debt from september 20th to 21 of October, that's a guess but would not be suprised if they are working on all the detials right now...

https://www.marketwatch.com/amp/stor...tions-c5e29f61

Lincoln Osiris

What one analysis says does not equate to what "institutional investors want".

Stayontarget

I can’t imagine the bond holders want a bankruptcy.

LAXtoDEN

I can’t imagine anyone being stupid enough to purchase Spirit. This place is riddled with high interest debt. You’d have better luck buying junk bonds.

They’ll file bankruptcy by the end of the year. What occurs during the bankruptcy proceedings is anyone’s guess.

Noisecanceller

Something is happening. You don’t just get a 30 day extension set by your card processor that set the deadline. Some sort of deal on the debt due next year, or a merger, or ch11 must be close to get a 30 day extension. I doubt they (spirit) could’ve just begged for more time. They had to have given them (card processor) some sort of assurances.

Alexjones

correct me but when JetBlue and Frontier both previously tried the merger/Acquisition, Didn’t we have the same amount of upcoming debt under the same interest rates ?

Sell the business at 1/4 of the previous price seems like a great deal to me

CincoDeMayo

The company has taken on much more debt since then and at that time of the merger discussions, the product was not “broken” as it is in its current form. It was still “transitory issues due to coming out of Covid”.

Noisecanceller

JetBlue wasn’t buying the product though so it being broken wouldn’t or shouldn’t matter to most.