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Sankaty Jet Capital, a subsidiary of AIP Capital, and Wheels Up Experience has announced the closing of a $68 million committed secured mezzanine facility.
The capital from this closing will be used in the purchase of additional Phenom 300 and Challenger 300 aircraft that are a part of Wheels Up fleet modernization plans. Wheels Up plans to double the size of its fleet by the end of the year and claims the plan will enhance cost efficiency and improve operational reliability. The facility will hold 51 existing aircraft and will accommodate more over the next 18 months. Its total appraised value is about $277.8 million.
"We are proud to commence our partnership with Wheels Up by providing a bespoke financing solution to support their fleet modernization program," said Sankaty CEO Ford von Weise.
"This strategic financing with Sankaty and AIP not only provides the investment capital needed to execute our growth plan but reflects confidence in the progress we're making towards building a strong and sustainable business," said George Mattson, Chief Executive Officer at Wheels Up.
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Wheels Up announced in its first-quarter results on Monday that its primary investor group, led by Delta Air Lines, has agreed to provide a $100 million loan to support its growth plans. In addition, it will receive an additional $100 million to expand its facilities.
"Wheels Up has solidified itself as the leading provider of on-demand private aviation," said Scott Debano, head of Capital Markets at AIP Capital. "This, coupled with our long-standing relationship with Delta Air Lines, which spans over two decades, created an opportunity for this transaction and we hope many more to come."