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Azul Airways Wipes Out $2.1 Billion in Debt Via Landmark Agreements with Bondholders and Companions
Wednesday, January 29, 2025
Azul, Brazil’s main airline when it comes to locations served and each day flights, introduced on Tuesday the profitable conclusion of negotiations with bondholders, lessors, and plane producers. This settlement has led to the elimination of over $2.1 billion in debt and monetary obligations from its stability sheet. Key parts of this restructuring embody the change of $557 million value of convertible devices held by lessors and OEMs into 94 million most well-liked AZUL4 shares, and the conversion of greater than $785 million in monetary debt maturing in 2029 and 2030. Moreover, different measures have been carried out to boost the corporate’s money move.
With over 16 years of operations in Brazil, Azul navigated a difficult exterior surroundings final yr, marked by the devaluation of the Brazilian actual towards the greenback, hovering aviation gas prices (among the many highest globally), a excessive litigation charge within the sector, world provide chain disruptions, and extreme flooding in southern Brazil. Regardless of these hurdles, Azul efficiently reached amicable agreements with all its traders and monetary and industrial companions, demonstrating the robust belief it holds inside the market.
“This is another very important moment in Azul’s history, as we conclude a negotiation process that will solidify our company even further. In addition to the extinction of US$ 2.1 billion in financial obligations, we received today a new capital injection of more than US$ 525 million, which will increase our liquidity and ensure we are stronger than ever,” highlights John Rodgerson, CEO of Azul.
The elimination of obligations contains strategic industrial agreements with lessors, producers, and different suppliers, securing an enhancement of money move by over $300 million by means of the tip of 2027.
Past boosting money move over the subsequent three years, these agreements will even scale back Azul’s leverage by roughly 1.4x on a professional forma foundation, based mostly on third-quarter 2024 figures.
“We are very optimistic about Azul’s future. We will add 15 new Embraer E2s to our fleet throughout this year, which will be extremely valuable to solidify our plan and expand access to air travel across the country. We thank our partners and investors for their trust, which allowed us to successfully conclude this negotiation and who will continue to support us in the constant strengthening of Azul,” concludes the manager.
