Wheels Up has entered into a sale and leaseback deal with an “institutional capital provider” for 10 of its aircraft.
The private aviation supplier said it will sell seven Phenom 300s and three Challenger 300s and enter into long-term operating leases for all 10 aircraft.
“Wheels Up will continue to operate the aircraft, ensuring uninterrupted access for members and customers, including during the busy holiday flying season," the company said.
Wheels Up also said the purchase price for the sale is around $105 million. Proceeds will be used to repay around $65 million of its outstanding debt under its revolving equipment notes facility and will provide around $40 million of cash net proceeds to the company's balance sheet.
“The cash proceeds and incremental borrowing capacity unlocked by the transaction are expected to support Wheels Up's planned 2026 acquisitions of additional Challenger and Phenom aircraft,” it said.
The transaction is expected to close before the end of this year.
“The sale-leaseback agreement further validates our strategy via the partnership of a sophisticated financial institution, balances our mix of owned and leased aircraft, and supports recent and future sustainable growth by providing additional capacity to continue executing our fleet plan in 2026,” said Wheels Up CEO George Mattson.
Last week, the company received a notice from the New York Stock Exchange (NYSE) stating that its share price fell below the required $1 to continue listing on the exchange.
The company's stock price closed yesterday (December 22) at $0.63 per share.
The notice has no immediate effect on the company's listing of common stock on the NYSE, but it now has six months from the notice to regain the minimum share price.
Wheels Up said it “may consider various available options to regain compliance”. This includes a potential reverse stock split, which was previously authorised by shareholders.
This would reduce its total shares to fewer but create higher-priced shares, boosting its stock price. However, the company's board has not yet approved this move.
In addition to the sale and leaseback deal, the company announced that its first Phenom 300 equipped with the Gogo Galileo HDX satellite Wi-Fi system has now entered service. This marks the start of a fleet-wide upgrade to next-generation Gogo Galileo connectivity.