Spirit Airlines Files for $300 Million Initial Public Offering to Pay Debt
Spirit Airlines Inc., the U.S. carrier that charges for carry-on bags in overhead bins, filed to sell $300 million of stock in an initial public offering and said it plans to use some of the proceeds to repay debt.
The company said it will retain $150 million in net proceeds from the IPO. Spirit owed $263.7 million on notes as of June 30, including principal as well as accrued and unpaid interest, according to a filing today. Investment funds managed by Indigo Partners LLC acquired a majority stake in Miramar, Florida-based Spirit in 2006.
Spirit’s announcement comes 2 1/2 months after Global Aviation Holdings Inc. filed for an IPO of as much as $100 million. More than two years have passed since the last IPO of a U.S. airline, Fort Lauderdale, Florida-based Gulfstream International Group Inc.’s initial offering in December 2007, data compiled by Bloomberg show.
Allegiant Travel Co., the Las Vegas-based passenger airline that caters to leisure travelers in smaller cities, went public a year before Gulfstream, while JetBlue Airways Corp. raised $182 million in April 2002, the data show.
Today’s filing comes after at least 43 U.S. companies withdrew or postponed IPOs this year amid signs that the economic recovery is slowing. The Standard & Poor’s 500 Index is down 7.5 percent from its 2010 high.
The Caribbean and Latin America are the company’s main target growth markets, according to the filing. Spirit, which serves 40 airports, posted net income of $83.7 million on $700 million in revenue last year.
The policy of charging for carry-on bags was challenged this year when U.S. senators proposed legislation seeking to ban the practice. Spirit Airlines passengers must pay as much as $45 for bags that don’t fit under the seat.
To contact the reporter on this story: Andrea Snyder at asnyder5@bloomberg.net
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