São Paulo, June 13, 2023 – Azul S.A., (B3: AZUL4, NYSE: AZUL) (“Azul” or the “Company”) announces today that its subsidiary, Azul Investments LLP (“Issuer”), has launched offers to exchange (“Exchange Offers”): (i) the 5.875% Senior Notes due 2024 issued by the Issuer (“Existing 2024 Notes”) for 11.500% Senior Secured Second Out Notes due 2029 (“New 2029 Notes”); and (ii) the 7.250% Senior Notes due 2026 issued by the Issuer (“Existing 2026 Notes”) for 10.875% Senior Secured Second Out Notes due 2030 (“New 2030 Notes”). The Exchange Offers will be made only to eligible holders of the Existing Notes.
Azul has entered into a Transaction Support Agreement (“TSA”) dated June 13, 2023, with an ad hoc group of holders of Existing Notes (the “Supporting Noteholders”). Subject to the terms and conditions set forth in the TSA, the Supporting Noteholders have agreed to tender their Existing Notes in the Exchange Offers. The Supporting Noteholders represent 65.5% of the aggregate principal amount of the Existing 2024 Notes and 65.8% of the aggregate principal amount of the Existing 2026 Notes outstanding as of the date hereof.
The Exchange Offers is part of the Company’s comprehensive and permanent restructuring plan to optimize its debt amortization profile and capital structure.
The New 2029 and 2030 Notes (“New Notes”) will be issued by Azul Secured Finance LLP, a newly-formed Delaware limited liability partnership that is a wholly-owned subsidiary of Azul Linhas Aéreas Brasileiras S.A. (“New Notes Issuer”).
The New Notes will be guaranteed by the Company and its subsidiaries Azul Linhas Aéreas Brasileiras S.A., IntelAzul S.A. and ATS Viagens e Turismo Ltda., as well as Azul IP Cayman Holdco Ltd. and Azul IP Cayman Ltd., to be incorporated prior to closing of the Exchange Offers (together, the “Guarantors” and, together with the New Notes Issuer, the “Obligors”). The New Notes will be secured by a shared collateral package that, with effect from the date of issuance of the New Notes, will secure the New Notes and certain other debt and other obligations of the Obligors. The payment priority relating to the New Notes and such other debt and other obligations will be established in an intercreditor agreement.
The offering of the New Notes pursuant to the Exchange Offers has not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold absent registration under, pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
The New Notes have not been and will not be issued or placed, distributed, offered or traded in the Brazilian capital markets and the issuance of the New Notes and the Exchange Offers has not been nor will be registered with the Brazilian Securities Commission (“CVM”).
There can be no assurance that the conditions to either or both of the Exchange Offers will be satisfied or waived, or that either or both of the of the Exchange Offers will be consummated.
This communication is for information purposes only, in accordance with current legislation and shall not be interpreted or considered, for all legal purposes and effects, as an offering and/or promotional material for the New Notes.
Azul will keep investors and the general market updated on the progress of the Exchange Offers.