Azul Linhas Aéreas Brasileiras (AD, São Paulo Viracopos) has two options to raise about USD400 million in new cash: a fresh financing accord with its existing ad hoc group of bondholders, or receiving capital that Jefferies Financial Group is trying to raise from other investors.
The first option may entail a future debt-for-equity swap, while the latter would be based on a traditional convertible bond, according to Reuters. Meanwhile, Bloomberg reported that the Brazilian carrier has been having trouble finding takers for the full amount of USD400 million it needs to raise in financing.
Citing people familiar with the matter, Bloomberg says Azul and Jefferies Financial Group, the underwriter of its recent agreement with lessors and OEMs to cut about USD545 million worth of Azul debt, are rushing to raise the cash to meet a deadline of USD68 million in bond payments due this month.
Debtwire reported that the ad hoc group has presented Azul with a new offer including new bonds and an equity element not linked to the new money but to other bonds. This offer reportedly has a more comprehensive structure "involving not only the company's capitalisation, but a greater deleveraging of its balance sheet."
The recent deal with lessors and OEMs was conditional on the carrier raising USD400 million in fresh liquidity. Azul is willing to use its freighter subsidiary, Azul Cargo, as collateral on the deal.
ch-aviation understands the Reuters report is closer to how the airline's negotiations are evolving.
The Brazilian carrier declined to comment.
According to its financial results, Azul reported an adjusted net loss of BRL1.06 billion Brazilian reais (USD187.7 million) in the first half of 2024 with BRL2.71 billion (USD442.4 million) worth of cash on hand.
