(Reuters) – Shares of Spirit Airways (NYSE:) surged as a lot as 46% on Monday after the extremely low-cost service reached a cope with 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 gives some elbow room to Spirit to refinance its $1.1 billion loyalty bonds resulting from mature subsequent 12 months. 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 12 months with over $1 billion in liquidity.
“Spirit has to deal with debt fee timing and resizing the mounted price construction, and it’s nonetheless unclear if this may be accomplished with/with out Chapter 11,” mentioned Savanthi Syth, analyst at Raymond James.
Spirit, which has didn’t report a revenue within the final 5 out of six quarters, unveiled plans to faucet into premium journey in July to mitigate price pressures and enhance earnings. This marked a significant shift away from its no-frills, ultra-low price mannequin.
Shares of Spirit have fallen about 91% this 12 months, whereas the passenger airways index jumped 33%.
