São Paulo, September 13, 2020 – Azul S.A., “Azul” (B3:AZUL4, NYSE:AZUL), announces that it received a funding proposal ("Proposal") from the Brazilian Development Bank (“BNDESPAR”) and a bank syndicate ("Banks"), subject to final approvals, in connection with an emergency program created to support sectors affected by the COVID-19 pandemic.
The Proposal foresees a public offer of a hybrid financial instrument with the objective of raising at least R$ 2 billion, which consists of: (i) simple debentures and (ii) stock warrants, with a premium and exercise price to be defined through the offer’s bookbuilding process. The proposed loan structure also provides that BNDESPAR is the anchor investor and can subscribe for up to 60% of the offer while the Banks will provide a firm guarantee of up to 10% of the offer. The remaining balance must be raised from qualified investors through a public offer.
We estimate that the issuance of stock warrants will result in a potential dilution of approximately 15% based on the closing price of Azul's share last Friday.
Within the context of customer demand recovery and the Company's cash position, both stronger than originally expected, the Company’s Board of Directors will discuss the proposal received from BNDESPAR as well as other capital-raising alternatives. The Company will keep the market informed of any relevant developments related to the subject.