Azul Airlines Launches $700 Million Share Offering To Restructure Debt

(MENAFN- The Rio Times) Azul Airlines announced today a primary public offering of preferred shares that could raise up to R$4.1 billion ($700 million) as part of its ongoing financial restructuring efforts.

The Brazilian carrier filed the request with the Brazilian Securities Commission (CVM) on April 14, 2025. The airlin initially plans to issue 450,572,669 new preferred shares priced at R$3.58 each, which would generate R$1.6 billion ($271 million) in fresh capital.

Azul maintains the option to increase this offering by 155%, potentially reaching 697,916,157 shares and boosting the total raised to R$4.1 billion ($695 million).

Investors who purchase shares through this offering will receive one warrant per share as an additional benefit. These warrants grant the right to buy more Azul shares between November 15 and December 15, 2026, after which they expire.

The share price reflects a 15% discount from the volume-weighted average price of Azul's preferred shares over 30 trading sessions from January 9 to February 19, 2025.



This pricing strategy aims to attract investors despite the company's challenging financial position. UBS BB will lead the coordination of the offering, with BTG Pactual and Citigroup serving as additional bookrunners.

Existing shareholders who held Azul shares as of April 10 receive priority rights to purchase shares proportional to their current holdings until April 22. The company expects trading of the new shares to begin two business days after the announcement of the offering's commencement.

Settlement will occur on the third business day. The official announcement is scheduled for April 23, with settlement expected by April 28.
Azul Airlines Seeks Capital Raise Amid Debt Challenges
Azul's offering comes at a critical time for the airline, which reported annual revenues of $3.16 billion but faces significant debt challenges. The company's market capitalization currently stands at just $177.94 million, with its stock down over 77% in the past year.

The airline aims to use the proceeds to improve its capital structure and increase liquidity. A key objective involves the mandatory equitization of certain notes due in 2029 and 2030, effectively converting debt to equity to strengthen the balance sheet.

This capital raising effort occurs amid broader struggles in the Brazilian airline industry. Competitor Gol Airlines reported a R$552 million ($93.6 million) loss in February 2025 and continues to navigate judicial reorganization.

Raymond James recently adjusted its price target for Azul to $5.00 from $6.00, maintaining an Outperform rating. The firm acknowledged Azul's progress in restructuring but noted potential delays in achieving its 2025 EBITDA target of R$7.4 billion ($1.25 billion) due to currency fluctuations.

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