The company claims to have submitted a judicial recovery already guaranteed with its main financial partners a financing commitment of approximately 1.6 billion US dollars
THE Blue consider that your request from chapter 11 (equivalent to judicial recoveryus United States), announced on the morning of Wednesday 28, “is different from any other aerial renovation in Latin America”.
The company attributes this to the fact that it has entered the process having guaranteed with its main financial partners a commitment for financing in the English “Dip”, which consists of a type of financing used by the companies in judicial recovery to provide the lack of cash flow of approximately $ 1.6 billion.
According to the company, the amount will pay part of the existing debt and will provide blue about 670 million dollars of capital to strengthen liquidity during and after the process. The company’s expectation is that the sewing of agreements with partners and the definition of output strategies accelerate the recovery process.
The partners mentioned include United and American Airlines, which will become Azul’s partner. However, the participation of US companies in Brazilian society is not yet defined. Azul has also reached a consent with ARCAP, which represents most of the company’s leasing liability.
“We are grateful for the support of our bondholders, in particular those who are providing new features in Azul and our strategic partners of the American airlines, United Airlines and ARCAP. Their support will allow us to optimize our fleet, strengthen our financial position and operate more efficiently”, says the CEO Blue John Rodgerson.
Historically, the executive was against chapter 11 and strengthened that the attention of the company was to equalize the balance without having to resort to the tool, which occurred with the competitors Latam and goal. However, the possibility of judicial recovery has returned to the negotiation table with the creditors recently after the company’s financial situation has worsened and difficulty collecting capitals and renegrating the debts.
Support
At the end of the trial, the AMMOTIZATION DIP is expected to finance a share subscription offer up to $ 650 million, with a company guarantee by these investors, as well as an additional investment of up to $ 300 million from United Airlines and American Airlines, for a total of $ 950 million. In total, the company plans to eliminate more than $ 2 billion of debt.
“We are confident that Azul’s plan to strengthen its future will be extremely positive for the Brazilian aviation market and travelers to be/ae within Brazil,” said Stephen Johnson, vice -president and director of the American Airlines strategy.
In the same line, the CEO of ARCAP Aengus Kelly said she was “very confident that Azul will leave this process stronger than ever”. The executive vice -president and commercial director of the United Airlines Andrew Nocella said that Azul is “more than a simple commercial partner of the company”. Therefore, United has chosen to support the restructuring process and “establish agreements to build an even stronger relationship in the future”.
Independent Committee
The Board of Directors of Azul approved on Wednesday the creation of a special independent committee to face that we have relative to chapter 11.
The Committee will act as an advisory body of the Board of Directors. Therefore, it will have powers and skills to evaluate, review, plan, supervise the negotiations and provide recommendations to the Council on any deriving issue or relating to the procedures of chapter 11, according to a document published by the Company.
The Committee is made up of three members: Renata Faber Rocha Ribeiro, Jonathan Seth Zinman and James Jason Grant, all independent consultants of the company.
Source: Terra
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