Wheels Up (NYSE:UP) stock briefly rose about 8% in premarket trading before sinking over 20% today after the market opened. Earlier this morning, the aviation start-up announced that it would explore strategic options. Moreover, UP disclosed that it had received a short-term cash infusion from Delta Air Lines (NYSE:DAL).
However, UP’s funds are still reportedly low, forcing it to look for additional capital.
Wheels Up is an “on-demand” private aviation company that offers “charter, aircraft management services and whole aircraft sales.”
Strategic Options, Delta’s Infusion, and a Divestment
Earlier this morning, Wheels Up disclosed that it’s “actively involved in discussions” about obtaining ” strategic business partnerships..to transform (its) business”
Additionally, the troubled firm reported that it had obtained “a short-term capital infusion” from Delta, RTT News noted.
Also importantly, Wheels Up reported that it had made a tentative agreement “to sell its non-core aircraft management business.”
Meanwhile, Bloomberg, citing unnamed sources, reported that UP is looking for additional funds as its liquidity “dwindles.”
And according to the news service, the firm is collaborating with investment bank Jefferies and law firm Kirkland & Ellis to evaluate possible courses of action. On its website, the law firm reports that it has “widespread experience in all forms of complex financial and operational restructurings and insolvency proceedings, including representing debtors, distressed investors, and creditors in all restructuring efforts both in and out of Chapter 11. ”
More About Wheels Up and UP Stock
Founded in 2013, Wheels Up reported an operating loss of $362 million in 2022 versus an operating income loss of $196 million in 2021.
As of the end of last quarter, it had total cash of $363.2 million and debt of $324.54 million.
Heading into today, UP stock had sunk 77% in 2023.
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On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
