lowecur
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Spirit gets a big investor
Great news for Spirit. Get ready to get your applications in boys and girls.
California Firm to Buy Majority of [COLOR=sky blue]Spirit Airlines[/COLOR]
By Rajiv Vyas, Detroit Free Press
Feb. 11--A California-based investment company is set to pick up a majority stake in Spirit Airlines Inc., Detroit Metro's second biggest carrier, a source close to the deal said.
Oaktree Capital Management LLC of Los Angeles is close to finalizing a $125-million investment deal in Miramar, Fla.-based Spirit Airlines -- which was established in Eastpointe in 1980.
The deal could be announced this week, the source said. The percentage of Oaktree's stake is unclear.
Although Oaktree is expected to acquire a majority stake, the current management at Spirit, including Chief Executive Jacob Schorr, would stay, the source said.
It is not clear what the new role of founder and chairman Ned Homfeld would be. But there could be a change in Spirit Airlines' board because investment firms like Oaktree often bring in directors to help monitor investments.
"This is the seed capital that would help (Spirit) grow," said Ray Neidl, an analyst with New York investment firm Blaylock & Partners. He said Spirit is profitable, but its balance sheet and cash position are weak. The new money would give Spirit the cushion it needs, he said.
The airline said it would use the money to buy new planes, replace its aging MD80 fleet with new planes from Airbus or Boeing and increase its flights and services.
The company wants nearly double its fleet from 27 to 50.
"We want to have a better balance sheet and be better capitalized to continue our growth," Homfeld said in the June interview. He could not be reached for comment Tuesday.
For the past six years, Spirit and other discount airlines have grown at a breakneck pace when the overall airline industry has floundered.
Spirit's revenues have grown more than five times between 1997 and 2003, rising from $81 million to $450 million. At the same time it has more than doubled its fleet and added more than 2,000 employees -- it now employs 2,700.
Great news for Spirit. Get ready to get your applications in boys and girls.
California Firm to Buy Majority of [COLOR=sky blue]Spirit Airlines[/COLOR]
By Rajiv Vyas, Detroit Free Press
Feb. 11--A California-based investment company is set to pick up a majority stake in Spirit Airlines Inc., Detroit Metro's second biggest carrier, a source close to the deal said.
Oaktree Capital Management LLC of Los Angeles is close to finalizing a $125-million investment deal in Miramar, Fla.-based Spirit Airlines -- which was established in Eastpointe in 1980.
The deal could be announced this week, the source said. The percentage of Oaktree's stake is unclear.
Although Oaktree is expected to acquire a majority stake, the current management at Spirit, including Chief Executive Jacob Schorr, would stay, the source said.
It is not clear what the new role of founder and chairman Ned Homfeld would be. But there could be a change in Spirit Airlines' board because investment firms like Oaktree often bring in directors to help monitor investments.
"This is the seed capital that would help (Spirit) grow," said Ray Neidl, an analyst with New York investment firm Blaylock & Partners. He said Spirit is profitable, but its balance sheet and cash position are weak. The new money would give Spirit the cushion it needs, he said.
The airline said it would use the money to buy new planes, replace its aging MD80 fleet with new planes from Airbus or Boeing and increase its flights and services.
The company wants nearly double its fleet from 27 to 50.
"We want to have a better balance sheet and be better capitalized to continue our growth," Homfeld said in the June interview. He could not be reached for comment Tuesday.
For the past six years, Spirit and other discount airlines have grown at a breakneck pace when the overall airline industry has floundered.
Spirit's revenues have grown more than five times between 1997 and 2003, rising from $81 million to $450 million. At the same time it has more than doubled its fleet and added more than 2,000 employees -- it now employs 2,700.
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