Delta-led consortium finalize investment in Wheels Up

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Delta Air Lines and a consortium of investors, including Certares, Knighthead, and Cox Enterprises, have agreed to provide a $500 million credit facility to private jet firm Wheels Up. This follows the recent appointment of George Mattson as Wheels Up’s new CEO. The credit facility consists of a $350 million term loan and a $100 million revolving credit facility. The lenders will initially receive 80% of Wheels Up’s equity, rising to 95% after approval by stockholders. Delta’s CFO, Dan Janki, believes this investment and leadership change will set Wheels Up on a path to success.

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A group of investors led by Delta Air Lines has recently completed a deal with Wheels Up, a private jet firm, securing a $500 million credit facility. This partnership also includes Certares, Knighthead, and Cox Enterprises as financiers. The announcement comes after the appointment of George Mattson as the new CEO of Wheels Up.

Fun fact: Delta Air Lines is one of the largest and oldest airlines in the world. It was founded in 1924 as “Huff Daland Dusters” and started passenger services in 1929.

In August 2023, Wheels Up had revealed its involvement in discussions about strategic business partnerships. During that time, the struggling company managed to secure a $15 million capital infusion from Delta, their largest shareholder, to support their operations.

Commentary: The $500 million credit facility provided by Delta and other investors is a significant financial boost for Wheels Up. This partnership not only provides much-needed capital for the struggling private jet firm but also brings experienced investors with a deep understanding of the premium travel industry. It shows confidence in Wheels Up’s future growth and performance.

The credit facility consists of a $350 million term loan and a $100 million revolving credit facility. Additionally, there is a possibility of another $50 million term loan from a new lender after the closing date, pending approval from Delta, Certares, Knighthead, and Cox.

Fun fact: Cox Enterprises, one of the investors in this deal, is a leading communications, media, and automotive services company. It was founded in 1898 and has been a family-owned business for over 120 years.

As part of the agreement, the lenders will initially receive newly issued Wheels Up common stock representing 80% of the company’s equity, and this will increase to 95% after approval from Wheels Up’s stockholders.

Commentary: This credit facility allows Wheels Up to strengthen its financial stability, pursue long-term growth, and deliver exceptional customer experiences. With the support and expertise of its investors, especially Delta, Wheels Up aims to create a seamless connection between private and premium commercial travel, providing unique benefits to its customers.

The collaboration between Delta Air Lines and Wheels Up is a testament to their existing strong partnership. Delta sees Wheels Up as an integral part of its portfolio of premium partners, emphasizing the opportunities to provide compelling benefits to customers in the travel industry.

Overall, this financing agreement and new leadership position Wheels Up for success, giving them the resources and expertise to navigate the challenges of the private jet industry and continue delivering top-tier services to their members and customers.

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