Wheels Up finalizes investment agrement with Delta, Certares, Knighthead, Cox

Wheels Up (UP) has closed the investment by Delta Air Lines (DAL), Certares Management LLC, Knighthead Capital and Cox Enterprises. The new investment structure includes an agreement for a $500M credit facility to Wheels Up, with funds contributed by Delta and CK Wheels, which is co-managed by affiliates of Certares and Knighthead, and Cox. The credit facility is comprised of a $350M term loan funded at closing from Delta, CK Wheels LLC and Cox and a $100M revolving credit facility from Delta. The terms of the credit agreement permit a new lender to provide a $50M 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.