Azul concludes negotiations worth over $2.4B with bondholders and OEMs

The company states: “Azul (AZUL) announced this Tuesday the conclusion of the negotiation process with its bondholders, lessors and aircraft manufacturers, resulting in the elimination of over $2.1B in debt and financial obligations from the company’s balance sheet. This is the result of the exchange of instruments convertible into company stock worth $557M held by lessors and OEMs for 94 million preferred AZUL4 shares, as well as converting more than $785M of financial debt maturing in 2029 and 2030, along with other improvements to the company’s cash generation. With over 16 years of operation in Brazil, the company faced last year a challenging external scenario, with the devaluation of the real against the dollar; operational costs highly impacted by the price of aviation fuel, which is one of the most expensive in the world; the high rate of litigation in the sector; the global supply chain crisis; and the floods in the south of Brazil. Even with this scenario, Azul was able to reach amicable agreements with all its investors and commercial and financial partners, enabled by the trust of the overall market. The extinction of obligations includes strategic commercial agreements with lessors, manufacturers, and other suppliers, also ensuring a strengthening of the cash flow by more than US$ 300 million until the end of 2027. In addition to providing an improvement in cash flow over the next three years, the conclusion of the agreements will deleverage Azul by approximately 1.4x on a pro-forma basis using 3Q 2024 figures.”