(Reuters) – Shares of Spirit Airways (NYSE:) surged as a lot as 46% on Monday after the extremely low-cost service reached a take care of its bank card processor to increase a debt refinancing deadline by two months till Dec. 23.
The settlement with U.S. Financial institution Nationwide Affiliation supplies some elbow room to Spirit to refinance its $1.1 billion loyalty bonds attributable to mature subsequent yr. The earlier refinancing deadline was Oct. 21.
The Florida-based firm mentioned on Friday it had absolutely drawn down its $300 million revolving credit score facility and expects to finish this yr with over $1 billion in liquidity.
“Spirit has to address debt payment timing and resizing the fixed cost structure, and it is still unclear if this can be completed with/without Chapter 11,” mentioned Savanthi Syth, analyst at Raymond James.
Spirit, which has did not report a revenue within the final 5 out of six quarters, unveiled plans to faucet into premium journey in July to mitigate value pressures and increase earnings. This marked a significant shift away from its no-frills, ultra-low value mannequin.
Shares of Spirit have fallen about 91% this yr, whereas the passenger airways index jumped 33%.
