The $500 million credit
facility is expected to provide financial stability and serve as a
strategic platform for future profitable growth
Also, announces new Board of Directors structure
NEW
YORK, Sept. 20, 2023 /PRNewswire/ -- Wheels Up
Experience (NYSE: UP) today announced that it has closed the
previously announced investment by Delta Air Lines, Certares
Management LLC, Knighthead Capital Management LLC and Cox
Enterprises.
The new investment structure combines the experience of Delta,
the No. 1 premium airline, with the travel and tourism focus of
Certares and turnaround and restructuring experience of Knighthead.
It includes an agreement for a $500
million credit facility to Wheels Up, with funds contributed
by Delta and CK Wheels LLC, which is co-managed by affiliates of
Certares and Knighthead, and Cox. The announcement follows last
week's selection of George
Mattson as the company's new CEO.
"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," Mattson said. "We look forward to working closely
with Delta and our other investors to deliver best-in-class
operating performance and an exceptional customer experience which,
as we deepen our commercial partnership, will also enable us to
provide a one-of-a-kind seamless connection between private and
premium commercial travel."
"Wheels Up is an integral part of Delta's portfolio of premium
partners, and this deep relationship offers a significant
opportunity to deliver compelling benefits to our customers that
are unique in the travel space," said Dan
Janki, Wheels Up Chairman and Delta's Chief Financial
Officer. "This investment and new leadership puts Wheels Up on a
strong path to future success."
The credit facility is comprised of a $350 million term loan funded at
closing from Delta, CK Wheels LLC and Cox and a $100 million revolving credit facility from
Delta. The terms of the credit agreement permit a new lender to
provide a $50 million term loan after the closing date, as
approved by Delta, Certares, Knighthead and Cox, and it is
anticipated this additional funding will close in the near
term.
In connection with the closing of the credit facility, the
lenders will initially receive newly issued Wheels Up common stock
representing 80% of the company's outstanding equity as of the
closing of the credit facility, on a fully diluted basis. After
approval by Wheels Up's stockholders of an amendment to its
certificate of incorporation, the company will issue to the lenders
additional new shares such that the lenders will own 95% of
the company's outstanding equity as of the closing of the credit
facility, on a fully diluted basis.
Wheels Up also announced a new structure for its Board of
Directors. Under the new structure, Delta Air Lines will appoint
four directors, Certares and Knighthead each will appoint two
directors, and Cox will appoint one director. In addition, one
company executive will join the Board and two independent directors
are expected to remain from the previous Board.
The parties were assisted in the transaction by a number of
strategic advisors, including: Davis
Polk, Jefferies LLC, Kirkland & Ellis and PJT
Partners.
About Wheels Up
Wheels Up is a leading provider of on-demand private aviation in
the U.S. and one of the largest private aviation companies in the
world. Wheels Up offers a complete global aviation solution with a
large, modern, and diverse fleet, backed by an uncompromising
commitment to safety and service. Customers can access membership
programs, charter, aircraft management services and whole aircraft
sales, as well as unique commercial travel benefits through a
strategic partnership with Delta Air Lines. Wheels Up also offers
freight, safety and security solutions and managed services to
individuals, industry, government, and civil organizations.
Wheels Up is guided by the mission to connect private flyers to
aircraft, and one another, through an open platform that seamlessly
enables life's most important experiences. Powered by a global
private aviation marketplace connecting its base of approximately
12,000 members and customers to a network of approximately 1,500
safety-vetted and verified private aircraft, Wheels Up is widening
the aperture of private travel for millions of consumers globally.
With the Wheels Up mobile app and website, members and customers
have the digital convenience to search, book and fly.
To learn more about Wheels Up, go
to Wheelsup.com
Cautionary Note Regarding Forward-Looking
Statements
This press release contains certain "forward-looking statements"
within the meaning of the federal securities laws. Forward-looking
statements are predictions, projections and other statements about
future events that are based on current expectations and
assumptions and, as a result, are subject to known and unknown
risks, uncertainties, assumptions, and other important factors,
many of which are outside of the control of Wheels Up Experience
Inc. ("Wheels Up"). These forward-looking statements include, but
are not limited to, statements regarding: (i) the impact
of new strategic initiatives on Wheels Up's business and results of
operations, including the expected impacts from director and
officer appointments, cost reduction efforts, measures intended to
increase Wheels Up's operational efficiency, and the ability of
Wheels Up to execute and realize the anticipated benefits from, and
the degree of market acceptance and adoption of, any new services
or partnership experiences, including member program changes
implemented in June 2023 and any future member program
changes; (ii) the competition in, size, demands and growth
potential of the markets for Wheels Up's products and services and
Wheels Up's ability to serve those markets; (iii) any
potential adverse impacts on the trading prices and trading market
for Wheels Up's common stock, par value $0.0001 per share, as a result of the closing of
the credit facility and dilutive stock issuances described in this
press release, including the impact of any contractual requirements
or covenants set forth in the definitive documents for such credit
facility and stock issuances on the Company's business, results of
operations and liquidity; (iv) the possibility of an
additional term loan being funded under the terms of the credit
agreement described in this press release; (v) Wheels Up's
liquidity, future cash flows, deferred revenue balances and certain
restrictions related to its debt obligations, including Wheels Up's
ability to perform under its contractual obligations to its members
and customers; and (vi) general economic and geopolitical
conditions, including due to fluctuations in interest rates,
inflation, foreign currencies, consumer and business spending
decisions, and general levels of economic activity. The words
"anticipate," "believe," continue," "could," "estimate," "expect,"
"intend," "may," "might," "plan," "possible," "potential,"
"predict," "project," "should," "strive," "would" and similar
expressions may identify forward-looking statements, but the
absence of these words does not mean that statement is not
forward-looking. Factors that could cause actual results to differ
materially from those expressed or implied in forward-looking
statements can be found in Wheels Up's Annual Report on Form 10-K
for the year ended December 31, 2022
filed with the U.S. Securities and Exchange Commission (the "SEC")
on March 31, 2023, Wheels Up's
Quarterly Report on Form 10-Q for the three months ended
June 30, 2023 filed with the SEC on August 14, 2023, and
Wheels Up's other filings with the SEC from time to time. You are
cautioned not to place undue reliance upon any forward-looking
statements, which speak only as of the date made. Except as
required by law, Wheels Up does not intend to update any of these
forward-looking statements after the date of this press release or
to conform these statements to actual results or revised
expectations.
Securities Disclaimer
The issuance, offer and/or sale of any securities described
herein has not been registered under any federal or state
securities laws and may not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of the
applicable federal and state laws. This press release shall not
constitute an offer to sell or a solicitation of an offer to
purchase any securities, and shall not constitute an offer,
solicitation or sale in any state or jurisdiction in which such an
offer, solicitation or sale would be unlawful.
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SOURCE Wheels Up
