São Paulo, July 3, 2020 – Azul S.A. (“Azul”) announces today that it has reached an agreement with the Portuguese Government that will enable a vital capital injection into TAP SGPS (“TAP”). As part of the agreement, Azul agreed to sell its current indirect participation representing 6% in TAP for approximately R$65 million and to withdraw conversion rights of its €90 million secured 2026 senior bond. In addition, all other contractual conditions remain reinforced, including its status of senior creditor, 7.5% annual interest rate, and collateral including TAP’s loyalty program. The principal amount plus accrued interest of the bond corresponds to approximately R$680 million. The transaction remains subject to Azul’s required corporate approvals, including shareholders’ approval at an extraordinary shareholders meeting.
“As many other airlines worldwide, TAP has been severely impacted by the Covid-19 crisis. With the aid provided by the Portuguese government we are able to ensure the continuation of TAP thereby guaranteeing the integrity of our bond”, said John Rodgerson, CEO of Azul.