Spirit Airlines looking to refinance its debt, not considering restructuring -source
By Rajesh Kumar Singh
(Reuters) -Spirit Airlines is looking at options to refinance its debt and is not considering restructuring, a person familiar with the matter told Reuters on Thursday.
The company's shares have been falling since Tuesday on investor concerns about its financial future after a U.S. judge blocked its $3.8 billion merger with JetBlue Airways (NASDAQ:JBLU).
The sell-off in the company's shares picked up speed Thursday afternoon after the Wall Street Journal reported that the ultra low-cost carrier was exploring restructuring options. The report did not provide any details on the discussions.
Spirit's shares, however, pared losses after Reuters reported the company's comments, and were down 7% in afternoon trade.
«Spirit will continue to take steps to shore up its balance sheet,» the person said, who asked not to be named as the discussions are still private. «What we're looking at is refinancing debt.»
Ratings agency Fitch on Wednesday said Spirit's credit profile was under pressure as it faced significant refinancing risk in the next year with its $1.1 billion loyalty program debt coming due in September 2025.
Earlier on Thursday, the company said it has been taking and will continue to take prudent steps to ensure the strength of its balance sheet and ongoing operations.
Since the court's ruling on Tuesday, a number of analysts have downgraded Spirit's stock and its shares have shed more than half of their value.
«Although JetBlue and Spirit can still appeal Tuesday's court ruling, it is unclear why JetBlue wouldn't cut its losses here and recognize that it avoided a risky bid on a highly levered carrier with steep losses,» Citi analyst Stephen Trent wrote in a note.
Spirit has been among the
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