Frontier Airlines is making another attempt to acquire bankrupt Spirit Airlines, the carrier announced Wednesday.
In a proposal presented to Spirit on Jan. 7, Frontier offered Spirit's debtors $400 million and a 19 percent stake in Frontier, according to U.S. Securities and Exchange Commission filings. The plan also requests $350 million in new funding from Spirit's creditors.
Frontier and Spirit in February 2022 agreed to merge in a $2.9 billion deal. JetBlue, however, made a competing offer for Spirit, a bidding war ensued, and Frontier in July 2022 called off the deal. Spirit agreed to be acquired by JetBlue for $3.8 billion, but in January 2024, a judge ruled against the merger in a suit brought by the U.S. Department of Justice. By March 2024, JetBlue and Spirit called off their merger.
Spirit on Jan. 23 disclosed that the hearing to consider confirmation of its bankruptcy exit plan was moved from Jan. 29 to Feb. 13 to "allow for further analysis and exploration of the [Frontier] Proposal."
Yet, in a Wednesday SEC filing, Spirit said that it would continue with its current plan to emerge from bankruptcy and noted that Frontier's proposal "would deliver less in value to the Company's stakeholders than what was contemplated by the Company's existing Plan." It also stated that Spirit's creditors were not willing to invest the $350 million in equity based on the terms of the current proposal, and it further would require Spirit to pay a $35 million backstop fee.
Spirit expects to complete its restructuring in the first quarter of 2025.