U.S. government bailout negotiations collapse, Spirit Airlines ceases operations

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On May 2nd, it was reported that Spirit Airlines (“Spirit Airlines”), a low-cost carrier that filed for bankruptcy due to the lack of support from creditors for the U.S. government bailout plan, has ceased operations. Previously, it was reported that the U.S. government was close to reaching a rescue plan for Spirit Airlines, which could grant the U.S. government an option to hold up to 90% of the shares after the airline emerges from bankruptcy. Sources said the agreement has not yet been finalized, and it proposes providing up to $500 million in financing in exchange for warrants to purchase up to 90% of the new entity’s shares. Negotiations are still uncertain, and an agreement may not be reached. (Jiemian)

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