On the financial front, Spirit said it’s working to restructure and reduce its debt, and that it has received backstopped commitments for a $350 million equity investment from existing bondholders, and will complete a deleveraging transaction to equitize $795 million of funded debt. The bondholders are also providing $300 million in debtor-in-possession financing.Spirit has struggled to overcome the slowdown in travel due to the pandemic. There was also the ill-fated attempt to sell the airline to JetBlue, which was blocked in federal court. Since the start of 2020, the airline has lost more than $2.5 billion and will face emerging debt payments totaling more than $1 billion over the next year. The Chapter 11 news comes after Spirit said last week that it wouldn’t announce its quarterly financial results as the company was focused on talks with bondholders to restructure its debt. Its CFO, Fred Cromer began in the role on July 8. Cromer has worked in the aviation industry for 30 years, most recently as CEO, and previously CFO of Xwing, Inc., an aviation technology company. He also served as CFO at ExpressJet Airlines. “I surmise his top priority now is the bankruptcy process, which is meant to buy time for the airline to try and improve its business results,” Nic Owens, industrials equity analyst at Morningstar, told me. Improving Spirit’s business results will be “very difficult and may require it to cut capacity, including getting rid of some planes and probably reducing its workforce,” Owens said.Spirit’s stock price is about down about 98% from its all-time high. As a result of the Chapter 11 filing, the company said it expects to be delisted from the New York Stock Exchange in the near term. Spirit also expects to exit the bankruptcy process in the first quarter of 2025. The beginning of holiday travel is just around the corner. And Spirit plans to continue operating its business “in the normal course” during the Chapter 11 process. Guests will still be able to use existing tickets, book flights, and use credits and loyalty points as normal, according to the company. Spirit also said the filing will not impact employee wages or benefits. Airlines typically can emerge from bankruptcy, which offers an opportunity to renegotiate debt, leases, and other contracts, Owens said. “In this case, it may still be an uphill battle for Spirit because their business is suffering from lower airfares and higher labor costs than they anticipated,” he said.Sheryl Estradasheryl.estrada@fortune.comThe following sections of CFO Daily were curated by Greg McKenna.LeaderboardKen Cook was named CFO of The Wendy’s Company (Nasdaq: WEN), effective Dec. 2. Cook will succeed Gunther Plosch who has served as CFO since 2016 and will depart the company at the end of the year. Cook most recently served as head of financial planning and analysis at United Parcel Service (UPS). In prior roles at UPS, Cook served as CFO for the U.S. Domestic segment, and previously held leadership roles in investor relations and treasury, and served at CFO of South Asia.Michael Abrams was named CFO of NRx Pharmaceuticals, Inc. (Nasdaq: NRXP), a clinical-stage biopharmaceutical company. Abrams succeeds interim CFO Richard Narido, who will continue to support the company's financial function and other projects. Abrams has almost three decades of experience as an executive officer, investment banker, director and senior advisor, which includes serving as the CFO of Arch Therapeutics, RiseIT Solutions. and FitLife Brands. Big DealOver four-in-five finance chiefs (82%) believe their companies leave money on the table during negotiations, according to a new survey from Icertis, a contract management software company. The company polled over 1,000 C-suite executives at companies with more than 5,000 employees. Seventy percent of CFOs identified cost increases due to inflation as the primary source of revenue leakage, with 40% saying their companies were not leveraging inflationary pricing protections in contracts. Unsurprisingly, the report found that both CEOs and CFOs are both heavily focused on utilizing artificial intelligence. Sixty-four percent of CEOs and 67% of CFOs said AI advancements would be the most impactful development on their companies over the next 10 years, outpacing climate change and geopolitical instability. Going deeper“Welcome to Elontown, USA: An unlikely Texas home base for Musk’s business empire,” is a new report from Fortune’s Jessica Mathews. As Austin emerged as one of the country’s tech hubs, Bastrop County was already facing a population boom before Musk made it a homestead for his various businesses. Now, Mathews writes, there’s a knot of excitement, wonder, suspicion, and apprehension about what’s to come. Overheard“I have this argument that college education has to evolve rapidly because we can’t be afraid of our kids interacting with technology. Because the first day they actually start a real job, they have to interact with technology.”—Krish Venkataraman, president of the software firm Dataiku, said during a discussion at the Fortune Global Forum. This is the web version of CFO Daily, a newsletter on the trends and individuals shaping corporate finance. Sign up for free.
