(RepublicanNews.org) – Another business traded on the NYSE has been forced to restructure itself and beg outsiders for assistance. The move is more evidence that “Bidenomics” has failed to jolt the American economy forward as needed.
Wheels Up Experience, a company that charters private jets, is in such financial dire straits that it has agreed to swap nearly all of its stock in exchange for a hefty amount of cash.
The company rents jets hour to hour and took a massive hit during the pandemic when travel largely came to a standstill. Pandemic-induced losses forced the business to cut both staff and management. In March of 2023, Wheels Up announced layoffs, but losses continued to add up after the fact.
Under the latest proposal, which is still non-binding, the company will receive $500 million in much-needed aid in exchange for 95 percent of its stock. Delta Air Lines, in cooperation with Knighthead Capital and Certares Management, will provide Wheels Up with a $400 million cash injection. Delta has also indicated they will be supplying a liquidity facility worth $100 million, which brings the loan total to half a billion dollars.
News of the proposed deal came shortly after an August 14th announcement from Wheels Up that said the company was considering bankruptcy. Once word of the restructuring hit the market, Wheels Up stock (UP) soared almost 30 percent in 24 hours.
Once the deal is finalized, Delta CFO Dan Janki will join the board of directors at the private charter. Beyond the liquidity they provide, Delta will bring Wheels Up access to their corporate accounts and extensive flight routes. The company will also be able to provide maintenance to Wheels Up jets.
Delta’s CEO, Ed Bastian, commented on the partnership and said that his company’s “unmatched expertise” in the airline industry “combined with” the “global reach” of Knighthead and Certares is “expected” to put Wheels Up on the road to becoming profitable.
Copyright 2023, RepublicanNews.org