Wheels Up has tapped Delta Air Lines for another $15 million in short-term capital infusion, bringing its total indebtedness to the U.S. carrier to $60 million from funds received since August 8. The cash-strapped private aviation group revealed the transaction late Friday in a Form 8-K filed with the U.S. Securities and Exchange Commission (SEC). The need to seek additional cash from Delta suggests that Wheels Up continues to record large monthly operating losses.
On August 15, Wheels Up announced that Delta and investment firms Certares and Knighthood would receive 95 percent of the company’s stock in exchange for a loan of $400 million plus a $100 million “liquidity facility” from Delta. In its latest quarterly financial statement, Wheels Up reported $161 million in losses and $335 million in revenue during the second quarter of this year while seeing its available cash erode from $363 million to $152 million—close to a $125 million minimum required by loan covenants.
Wheels Up shares have surged 50 percent in the last week, giving the company a market capitalization of $67 million. Over the last year, Wheels Up shares have shed 85 percent of their value, adjusted for a reverse stock split enacted by the company in June.
Wheels Up has tapped Delta Air Lines for another $15 million in short-term capital infusion, bringing its total indebtedness to the U.S. carrier to $60 million from funds received since August 8. The cash-strapped private aviation group revealed the transaction in a recent Form 8-K filed with the U.S. Securities and Exchange Commission (SEC). The need to seek additional cash from Delta suggests that Wheels Up continues to record large monthly operating losses.
On August 15, Wheels Up announced that Delta and investment firms Certares and Knighthood would receive 95 percent of the company’s stock in exchange for a loan of $400 million plus a $100 million “liquidity facility” from Delta.
Under that plan, Todd Smith remains as Wheels Up interim CEO, while Delta chief financial officer Dan Janki replaces Ravi Thakran as Wheels Up chairman.
“The partnership will create new opportunities for Wheels Up to drive strategic, operational, and financial improvements for its customers in the months and years ahead” and “speed Wheels Up on its path to profitability," said Delta CEO Ed Bastian of the agreement.
Delta had been Wheels Up’s largest individual shareholder, holding 20 percent of the company, which it had received in exchange for selling Wheels Up Delta Private Jets in 2013. Last year, Wheels Up announced that it was moving its operations center to Atlanta—the same city where Delta is headquartered—and that it had hired retired Delta executive Dave Holtz to run it as chairman of operations.
In its latest quarterly financial statement, Wheels Up reported $161 million in losses and $335 million in revenue during the second quarter of this year while seeing its available cash erode from $363 million to $152 million—close to a $125 million minimum required by loan covenants.
Wheels Up along with the cash infusion shares have surged 50 percent, giving the company a market capitalization of $67 million. Over the last year, Wheels Up shares have shed 85 percent of their value, adjusted for a reverse stock split enacted by the company in June.