We advised the investors on the financing and acquisition of 95% of the equity of Wheels Up

Davis Polk advised Delta Air Lines, Inc., Certares Management LLC and Knighthead Capital Management LLC in connection with an investment by Delta, Certares, Knighthead and Cox Enterprises in Wheels Up.

The transaction includes an agreement for a $500 million credit facility to Wheels Up, with funds contributed by Delta, CK Wheels LLC, which is co-managed by affiliates of Certares and Knighthead, and Cox. The credit facility is comprised of a $350 million term loan funded at closing from Delta, CK Wheels LLC and Cox and a $100 million revolving credit facility from Delta. The terms of the credit agreement permit a new lender to provide a $50 million 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. The 80% equity issuance proceeded on the basis of a waiver by the NYSE of the stockholder vote requirement based on a financial viability exception. We also advised our clients on an Investment and Investor Rights Agreement in connection with the transaction.

Wheels Up is a provider of on-demand private aviation in the U.S. and is one of the largest private aviation companies in the world. Founded in 2013 and headquartered in New York, Wheels Up operates a fleet of approximately 1,500 aircraft servicing individuals, industry, government and civil organizations. Its core offerings include membership programs, charter, aircraft management, whole aircraft sales, commercial travel services, freight, safety and security solutions and managed services.

The Davis Polk finance team included partner Vanessa L. Jackson, counsel Jason Palios and associate Yuko Sin. Partner Louis Goldberg, counsel Albert Zhu and associate Brian Lee provided corporate advice. Partner Maurice Blanco provided capital markets advice. The tax team included partner Corey M. Goodman and associate Bradford Sherman. Partner Adam L. Shpeen provided restructuring advice. All members of the Davis Polk team are based in the New York office.

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