Wheels Up backers extend lock-up restrictions

Key Wheels Up shareholders that gained 95% of the flight provider’s equity last year via a $500 million investment are extending their lock-up restrictions.

Delta Air Lines, Inc., CK Wheels LLC, and Cox Investment Holdings, LLC, have agreed to “extend the lock-up restriction with respect to all their shares of common stock issued last year under the Investment and Investor Rights Agreement, until September 20, 2025.”

Kore Capital LLC and funds managed by Whitebox Advisors LLC also agreed to extend the lock-up restriction on 72.5% of their shares until the same date.

Around 97.2% of the shares issued under the Investment and Investor Rights Agreement will remain subject to a lock-up restriction until next September.

“I appreciate the confidence and support of the company’s lead investors,” said Wheels Up CEO George Mattson.

He added, “We believe that this extended commitment by our investors allows us to continue executing our strategic plan.”

As of Friday, shares were trading at $2.36 for a market cap of $1.65 billion.

Background

The financing helped Wheels Up avert a possible bankruptcy.

After its 2021 IPO, there were both record revenues and mounting losses.

The 2013 start-up struggled to integrate a half-dozen acquisitions amid Covid shutdowns while losing money to fulfill jet card flights it had sold with capped hourly rates.

Since then, it has been shedding some of those companies and refocusing with an influx of Delta executives.

Delta CEO Ed Bastian has said Wheels Up is a key part of the airline’s premium strategy.

Executives have said the company expects to be EBITDA positive by year’s end.

Read the full SEC filing here.

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