Spirit Airlines in talks with Castlelake over potential takeover - report

(Sharecast News) - Low-cost US carrier Spirit Airlines is reportedly in talks with alternative investment firm Castlelake over a potential takeover as it looks for a path out of bankruptcy. Spirit filed for Chapter 11 bankruptcy last August for the second time in a year after its previous turnaround plan fell flat.

According to CNBC - citing people familiar with the matter - fellow budget carrier Frontier Airlines had been in talks with Spirit over the years for a potential merger, including in recent months, but didn't secure a deal. The two had reached a deal four years ago but this was called off after a surprise all-cash offer from JetBlue Airways.

Spirit and Castlelake didn't immediately respond to requests for comment from CBNC.

It was not immediately clear if Spirit's bondholders and Castlelake would reach a deal or what form it could take.

Last month, Spirit said it amended its agreement with creditors to receive another $50m in funding immediately, a lifeline for the carrier.

Further funding would be contingent on "further progress on a standalone plan of reorganization or a strategic transaction," Spirit said on 15 December. "Spirit is currently in active negotiations on each of these possibilities."