Wheels Up has closed on a deal for a half-billion-dollar investment by Delta Air Lines, Certares Management, Knighthead Capital Management, and Cox Enterprises.
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Wheels Up this afternoon closed a previously announced half-billion-dollar investment by Delta Air Lines, Certares Management, Knighthead Capital Management, and Cox Enterprises. The credit facility includes a $350 million term loan from Delta, CK Wheels, and Cox, a $100 million revolving credit facility from Delta, and a $50 million term loan that is subject to lender approval and expected shortly after closing.
In exchange, the lenders will receive common stock representing 80 percent of the company's outstanding equity at closing. After stockholder approval of an amendment to Wheels Up’s certificate of incorporation, the lenders will own 95 percent of the company’s outstanding equity.
“This investment represents both an important source of capital for Wheels Up to support our strategy for financial stability, future profitability, and long-term growth on behalf of our members and customers, as well as a vote of confidence in our path forward from a group of investors with deep experience in the premium travel space,” said George Mattson, who was appointed CEO of Wheels Up last week. “We look forward to working closely with Delta and our other investors to deliver best-in-class operating performance and an exceptional customer experience.”
Wheels Up chairman and Delta CFO Dan Janki added that the “deep relationship” between the airline and private air charter firm “offers a significant opportunity to deliver compelling benefits to our customers that are unique in the travel space.” Mattson also hinted at a “one-of-a-kind seamless connection between private and premium commercial travel.”
Additionally, Wheels Up created a new structure for its board of directors. Going forward, Delta Air Lines will appoint four directors, Certares and Knighthead each will appoint two directors, and Cox will appoint one director. One company executive will also join the board, and two independent directors are expected to remain from the previous board.
Delta Air Lines Consortium Completes Wheels Up Deal
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Wheels Up this afternoon closed a previously announced half-billion-dollar investment by Delta Air Lines, Certares Management, Knighthead Capital Management, and Cox Enterprises. The credit facility includes a $350 million term loan from Delta, CK Wheels, and Cox, a $100 million revolving credit facility from Delta, and a $50 million term loan that is subject to lender approval and expected shortly after closing.
In exchange, the lenders will receive common stock representing 80 percent of the company's outstanding equity at closing. After stockholder approval of an amendment to Wheels Up’s certificate of incorporation, the lenders will own 95 percent of the company’s outstanding equity.
“This investment represents both an important source of capital for Wheels Up to support our strategy for financial stability, future profitability, and long-term growth on behalf of our members and customers,” said George Mattson, who was appointed CEO of Wheels Up last week. Evoking the deeper relationship with Delta, he hinted at a “one-of-a-kind seamless connection between private and premium commercial travel.”
Additionally, Wheels Up created a new structure for its board of directors. Going forward, Delta Air Lines will appoint four directors, Certares and Knighthead each will appoint two directors, and Cox will appoint one director. One company executive will also join the board, and two independent directors are expected to remain from the previous board.