Spirit Airlines (SAVE, Financial), a low-cost carrier, saw its stock price dive to an all-time low in after-hours trading. This decline followed reports that the airline is negotiating with bondholders over potential bankruptcy filing terms. The stock plummeted 29% to $1.59, marking its largest percentage drop since January. In regular trading, the stock fell below the previous low of $2.22 and has dropped 86% this year.
Insiders reveal that Spirit is also exploring out-of-court restructuring options to manage its balance sheet. However, recent talks have been more focused on reaching an agreement with bondholders and other creditors to support a Chapter 11 bankruptcy filing. These sources indicated that even if such a filing occurs, it is not imminent.
This comes on the heels of Spirit's failed merger with JetBlue Airways. The company continues to grapple with significant losses and declining revenue, while facing imminent repayment deadlines on a portion of its $3.3 billion debt.
