Wheels Up Experience Inc. just got a fresh liquidity boost from its largest shareholder, Delta Air Lines Inc.
(Bloomberg) — Wheels Up Experience Inc. just got a fresh liquidity boost from its largest shareholder, Delta Air Lines Inc.
The struggling concierge jet-service firm has been seeking new financing from investors as its cash dwindles, according to people with knowledge of the situation. It has been working with Jefferies Financial Group Inc. and Kirkland & Ellis to explore options, including asset sales and cost cutting, to improve profitability.
“Delta, which has a long history of supporting its partners, is providing a short-term capital infusion in the form of a secured promissory note as the company pursues strategic partnerships,” the airline’s representatives said in an emailed statement Wednesday. The carrier, which called Wheels Up “a valued Delta partner,” declined to disclose the amount of the note.
Wheels Up could also get a cash injection from the sale of its non-core aircraft management business. Plans to sell those assets to Airshare are underway, according to a statement.
The New York-based company, which lets customers book private charter flights by the hour, has garnered big name investors including former LVMH executives and the consumer-focused private equity firm L Catterton, but has reported losses in every quarter since it went public through a reverse merger with a blank-check company in mid-2021.
As of March 31, Wheels Up had $363.2 million of cash on hand, and an additional $36.6 million of restricted cash. The company’s earnings report and conference call, previously scheduled for Wednesday, were canceled.
Company shares have slumped more than 80% this year, giving the company a market capitalization of under $50 million. The company completed a reverse stock split in June to avoid being delisted by the New York Stock Exchange.
–With assistance from Mary Schlangenstein.
(Update starts in first paragraph, includes Delta’s cash infusion and details throughout.)
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