Brazil’s Azul launches notes offering as part of broad restructuring plan

SAO PAULO (Reuters) – Brazilian airline Azul announced on Wednesday it is launching a public offering of senior secured notes due 2028, fulfilling its pledge to raise additional capital as it moves forward with a broader restructuring plan.

Azul, Brazil’s largest airline in number of flights and cities served, said in a statement it will pledge certain receivables from loyalty program TudoAzul and travel package business Azul Viagens as collateral in the offering.

The carrier had previously reached a deal with aircraft lessors to give them equity and tradable debt in exchange for lower payments, and last month announced exchange offers to delay the maturity of bonds expiring in 2024 and 2026.

Chief Executive John Rodgerson had told Reuters in an interview after those deals that Azul was ready to raise additional cash to “grow again”, as it plans to consolidate its long-term structuring and open new routes this year.

Azul did not immediately disclose the size of the offering.

Sao-Paulo traded shares in the firm were down 2% after the announcement, underperforming the 1.3% jump on benchmark stock index but still up more than 70% year-to-date.

“This offering represents an important milestone for Azul,” Chief Financial Officer Alex Malfitani said. “It brings us to the conclusion of a well-executed structuring management plan to optimize our capital structure and improve our liquidity.”

“Azul is now set into a new chapter of accelerated growth, new business opportunities and expansion of our domestic and international operations,” he added.