Wheels Up to Continue Operations After Closing Transaction with Delta, Other Investors

The investment agreement, which includes a $500 million credit facility to Wheels Up, combines the experience of Delta, the travel and tourism expertise of Certares, and the turnaround and restructuring knowledge of Knighthead. The announcement follows the selection last week of George Mattson as the new Wheels Up 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."

The credit facility includes a $350 million term loan funded at closing from Delta, CK Wheels LLC, and Cox, and a $100 million revolving credit facility from Delta. Under terms of the credit agreement, a new lender may provide a $50 million term loan after the closing date, as approved by Delta, Certares, Knighthead, and Cox. The companies said they expect to complete a transaction for the additional funding “in the near term.”

"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."

WIth the closing of the credit facility, the lenders will receive newly issued shares of Wheels Up common stock representing 80 percent of the company's outstanding equity at the time of the closing. After approval by Wheels Up's shareholders, the company will issue additional new shares to the lenders, who ultimately will own 95 percent of its outstanding equity as of the closing, the companies said.

Wheels Up also announced a new structure for its board, under which Delta will appoint four directors, Certares and Knighthead each will appoint two, and Cox will appoint one. One Wheels Up executive will join the board, and two independent directors are expected to remain from the previous board, the companies said.

A number of strategic advisors assisted with the transaction, including Davis Polk, Jefferies LLC, Kirkland & Ellis, and PJT Partners.