Spirit Airlines ownership change raises $125 million for new

[ALM]

By TOM STIEGHORST
sun-sentinel.com
Posted February 23 2004, 11:10 AM EST

Miramar-based Spirit Airlines said Monday it has raised $125 million in equity by selling majority ownership to investors led by Oaktree Capital Management, a Los Angeles venture capital fund.

Spirit employs about 2,700 people, including 1,200 in South Florida, and is the 14th largest U.S. airline with 115 daily departures.

The money will let Spirit order new planes to expand its fleet of 32 aircraft.

In an interview, Spirit chief executive officer Jacob Schorr said the money was critical to keeping Spirit competitive with other low cost competitors. JetBlue Airways and AirTran Airways are two carriers who charge comparable fares to Spirit but have more modern planes that can fly longer each day at lower cost than Spirit's MD-80 fleet.

Schorr said the U.S. Department of Transportation has approved the investment.

Spirit founder and chairman Ned Homefeld will step down from active management of the airline, but remain an owner, said Schorr, who will assume the additional title of chairman.

Spirit's board will be expanded to give seats to the new owners.

Oaktree Capital Management has about $26 billion in assets under management, primarily for corporations, endowments and public agencies. Last year it acquired a 9.7 percent stake in US Airways, along with two other investors.

Spirit flies year-round from Fort Lauderdale/Hollywood International Airport, where it had 7.6 percent of traffic in 2003. It flies from Palm Beach International Airport during the winter months only.