Jan 29 (Reuters) - Spirit Airlines ( SAVEQ ) on

Wednesday said it expects to exit bankruptcy in the first

quarter and rejected a merger with rival Frontier Group ( ULCC )

, saying it was not favorable for the low-cost carrier.

It received a proposal from Frontier earlier this month,

where in its shareholders would $400 million in debt and a 19%

share in Frontier, the company said in a regulatory filing.

Spirit rejected the proposal as it would not provide the

anticipated shareholder value and raised concerns over the

timing and successful completion of the deal.

The Florida-based airline declared bankruptcy in November

after grappling with prolonged periods of financial losses,

unsuccessful merger efforts and a substantial levels of debt.

The airline said it expects to complete its restructuring

process in the first quarter.