Spirit Airlines in talks with Castlelake for potential takeover

Investing.com -- Spirit Airlines is in discussions with alternative investment firm Castlelake regarding a potential takeover as the budget airline seeks to emerge from bankruptcy, CNBC reported on Thursday.

Frontier Airlines had also reportedly engaged in merger talks with Spirit over the years, including in recent months, but failed to secure a deal. The two budget airlines had previously reached a deal four years ago, but it was terminated following an unexpected all-cash offer from JetBlue Airways.

It remains unclear whether Spirit’s bondholders and Minneapolis-based Castlelake will reach an agreement or what structure such a deal might take. Castlelake has extensive experience in aviation finance and launched a new aviation lending division called Merit AirFinance in August with $1.8 billion in deployable capital.

The struggling discount carrier filed for Chapter 11 bankruptcy protection last August, marking its second bankruptcy filing within a year after its previous turnaround strategy failed to yield results.

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