The private jet charter company, Wheels Up, has offered 95% of it’s common stock to lenders in exchange for $500 million.
This proposal comes amid severe financial problems for the jet chartering company. Since Covid began, the amount of travel people were doing went down, therefore the need for private jets has also decreased.
Many financial losses have forced Wheels Up to pursue a variety of restructuring measures this year, including job cuts to its workforce and changes to its management team.
This latest funding deal includes $400 million term loan from its partners Delta Air Lines and investment firms Certares Management and Knighthead Capital Management. Delta would also provide a $100 million liquidity facility, bringing the total funding available to Wheels Up to $500 million.
“The partnership will create new opportunities for Wheels Up to drive strategic, operational and financial improvements for its customers in the months and years ahead,” Delta CEO Ed Bastian said in a statement. “Delta’s unmatched expertise in premium travel, customer loyalty, corporate sales, operational reliability and aircraft maintenance, combined with Certares’ and Knighthead’s experience and global reach, are expected to speed Wheels Up on its path to profitability.”