Spirit Airlines (SAVEQ) garnered retail attention on Thursday after a court approved its plan to exit bankruptcy by converting $795 million in debt to equity and emerge as a privately owned company.

The company said it expects to emerge from restructuring in the coming weeks following the approval of the United States Bankruptcy Court for the Southern District of New York to hand over the airline to creditors.

According to court documents, Spirit’s creditors include Citadel Advisors, Pacific Investment Management, and UBS Asset Management.

The plan, proposed in November, also entails an equity investment of $350 million in Spirit and the issuance of $840 million in fresh secured debt to its bondholders.

“As we move forward, our leadership team remains focused on reducing costs while also advancing our strategic initiatives to transform our Guest experience and position Spirit for success,” CEO Ted Christie said.

Thursday’s ruling comes after Frontier Airlines sought to buy Spirit earlier this year by issuing $400 million debt and a 19% stake. Spirit termed the offer as non-compelling and rejected it.

Frontier had first agreed to buy Spirit in 2022, but the deal did not take place after rival JetBlue made a better offer. A U.S. judge then blocked the deal with JetBlue following a challenge by the U.S. Department of Justice.

Spirit filed for bankruptcy protection in November after years of losses and the failed merger with JetBlue.

According to several media reports, the U.S. court also overruled objections raised by the U.S. Trustee to the releases of some parties who had ties to the restructuring process from creditors’ claims.

Retail sentiment on Stocktwits slumped into ‘bearish’ (35/100) territory from ‘bullish’ (63/100) a day ago, while retail chatter was ‘high.’

SAVEQ’s Sentiment Meter and Message Volume as of 01:21 a.m. ET on Feb. 21, 2025 | Source: Stocktwits

SAVEQ’s Sentiment Meter and Message Volume as of 01:21 a.m. ET on Feb. 21, 2025 | Source: Stocktwits

One user was disappointed with the approval and accused the company of making false promises.

Another user wondered if Frontier would come up with another offer.

Over the past month, Spirit stock has gained nearly 28%.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<

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