Proposed Transaction Delivers Higher
Recoveries for Spirit Financial Stakeholders, Including
Shareholders, Than Spirit Standalone Plan of Reorganization
Frontier Stands Ready to Continue Constructive
Discussions with Spirit and its Financial Stakeholders
DENVER, Jan. 29,
2025 /PRNewswire/ -- Frontier Group Holdings,
Inc. ("Frontier") (NASDAQ: ULCC), parent company of Frontier
Airlines, Inc. today confirmed it made a compelling proposal to
combine with Spirit Airlines, Inc. ("Spirit") through the issuance
of newly issued Frontier debt and common stock.
The proposed transaction would provide meaningful value to
Spirit financial stakeholders, in excess of Spirit's standalone
restructuring plan. As investors in the combined airline, Spirit's
financial stakeholders could participate in the upside of a
stronger low-cost carrier while benefiting from the very
significant synergies Frontier expects to achieve by combining the
airlines' operations.
Bill Franke, the Chair of
Frontier's Board of Directors and the managing partner of Indigo
Partners LLC, said, "This proposal reflects a compelling
opportunity that will result in more value than Spirit's standalone
plan by creating a stronger low fare airline with the long-term
viability to compete more effectively and enter new markets at
scale. We stand ready to continue discussions with Spirit and its
financial stakeholders and believe that we can promptly reach
agreement on a transaction. We are hopeful we can achieve a
resolution that delivers significant value for consumers, team
members, communities, partners, creditors and shareholders."
"While we are pleased with the strong results Frontier has been
able to deliver through the execution of our business strategy, we
have long believed a combination with Spirit would allow us to
unlock additional value creation opportunities," said Barry Biffle, CEO of Frontier. "As a combined
airline, we would be positioned to offer more options and deeper
savings, as well as an enhanced travel experience with more
reliable service."
Since submitting the proposal, Frontier has held discussions
with members of Spirit's board of directors and management team, as
well as representatives of Spirit's financial stakeholders with
respect to the proposal. As part of the discussions, Frontier
shared materials with Spirit and its financial stakeholders
regarding the benefits of the proposed transaction. The materials,
which are based on Spirit's bankruptcy court filings, also
demonstrate that Spirit's standalone plan will likely result in an
unprofitable airline with a high debt load and limited likelihood
of success.
The materials have been furnished on Form 8-K with the
Securities and Exchange Commission.
Frontier delivered a letter outlining the terms of its proposal
and Frontier's willingness to continue to engage in negotiations to
Spirit's Chair and Chief Executive Officer. The full text of the
letter follows:
Dear Mr. Gardner and Mr. Christie:
As has been confirmed in our discussions with
you and your advisors, both parties agree there is compelling
industrial logic to the combination of our two companies. To that
end, we have proposed to you a transaction, as previously
communicated and as attached herein. We believe this transaction
generates meaningful value for your stakeholders in excess of that
generated by the plan you currently have on file with the
Bankruptcy Court.
We put forward this offer in good faith,
understanding that it generates more value for all Spirit
stakeholders, including common stockholders. We have not, however,
received a specific counterproposal but stand ready to negotiate
any and all parts of this offer after receiving a substantive
response from you.
We continue to believe that under the current
standalone plan, Spirit will emerge highly levered, losing money at
the operating level, and this would not be a transaction we would
pursue. As a result, time is of the essence.
Sincerely,
Bill and Barry
Advisors
Citigroup Global Markets, Inc. is serving as financial advisor
and Latham & Watkins LLP is serving as legal counsel to
Frontier.
Cautionary Statement Regarding Forward-Looking Statements and
Information
Certain statements in this communication should be considered
forward-looking statements within the meaning of Section 27A of the
Securities Act, Section 21E of the Exchange Act, and the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are based on Frontier's current expectations and beliefs
with respect to certain current and future events and anticipated
financial and operating performance. Words such as "expects,"
"will," "would", "plans," "intends," "anticipates," "indicates,"
"remains," "believes," "estimates," "forecast," "guidance,"
"outlook," "goals," "targets" and similar expressions are intended
to identify forward-looking statements. Additionally,
forward-looking statements include statements that do not relate
solely to historical facts, such as statements which identify
uncertainties or trends, discuss the possible future effects of
current known trends or uncertainties, or which indicate that the
future effects of known trends or uncertainties cannot be
predicted, guaranteed or assured. All forward-looking statements in
this communication are based upon information available to Frontier
on the date of this report. Frontier undertakes no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events, changed circumstances
or otherwise, except as required by applicable law.
Actual results could differ materially from these
forward-looking statements due to numerous risks and uncertainties
related to Frontier's and Spirit's respective businesses and
Frontier's proposed transaction with Spirit including, without
limitation, the following: uncertainty as to whether Spirit will
further pursue, enter into or consummate the proposed transaction
on the terms set forth in the proposal or on other terms;
uncertainties as to the timing of the proposed transaction; adverse
effects on Frontier's share price resulting from the announcement
or completion of the proposed transaction or any failure to
complete the proposed transaction; failure to obtain applicable
regulatory or other required approvals in a timely manner; failure
to satisfy other closing conditions to the proposed transaction;
failure of the parties to consummate the proposed transaction;
risks that the combined companies will not realize estimated cost
savings, value of certain tax assets, synergies and growth, or that
such benefits may take longer to realize than expected or raise
unanticipated costs; failure to realize anticipated benefits of the
combined operations; risks relating to unanticipated costs of
integration; demand for the combined company's services; the
growth, change and competitive landscape of the markets in which
the combined company participates; expected seasonality trends;
diversion of managements' attention from ongoing business
operations and opportunities; potential adverse reactions or
changes to business, creditor or employee relationships, including
those resulting from the announcement or completion of the proposed
transaction or the Spirit Chapter 11 proceeding; competitive
responses to the announcement or completion of the proposed
transaction; risks related to investor and rating agency
perceptions of each of the parties and their respective business,
operations, financial condition and the industry in which they
operate; risks related to the potential impact of general economic,
political and market factors on the companies or the proposed
transaction; the impacts of Frontier's significant amount of
financial leverage from fixed obligations, the possibility Frontier
may seek material amounts of additional financial liquidity in the
short-term and the impacts of insufficient liquidity on Frontier's
financial condition and business; failure to comply with the
covenants in Frontier's financing agreements or failure to comply
with financial and other covenants governing Frontier's other debt;
changes in, or failure to retain, Frontier's senior management team
or other key employees; current or future litigation and regulatory
actions, including in relation to the proposed transaction, or
failure to comply with the terms of any settlement, order or
arrangement relating to these actions; increases in insurance costs
or inadequate insurance coverage; and other risks and uncertainties
set forth from time to time under the sections captioned "Risk
Factors" in Frontier's reports and other documents filed with the
Securities and Exchange Commission (the "SEC"), including
Frontier's Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, which was filed
with the SEC on February 20, 2024,
and Frontier's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2024, which was filed with
the SEC on May 2, 2024.
Contacts
Investor inquiries:
David Erdman, Investor
Relations
Email: David.Erdman@flyfrontier.com
Phone: 720.798.5886
Media inquiries:
Jennifer F. de la Cruz, Corporate
Communications
Email: JenniferF.DeLaCruz@flyfrontier.com
Phone: 720.374.4207
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SOURCE Frontier Group Holdings, Inc.
