São Paulo, March 05, 2023 – Azul S.A., “Azul” (B3: AZUL4, NYSE: AZUL) announces today that it has successfully reached commercial agreements with lessors that represent more than 90% of its lease obligations, subject to certain conditions and applicable corporate approvals.
These agreements represent a significant part of a comprehensive plan designed to strengthen Azul’s cash generation and improve its capital structure, and also deliver to lessors 100% of the prior-committed values through a combination of long-term debt and equity valued at a reset balance sheet.
Under these agreements, lessors will reduce Azul’s lease payments to eliminate Covid-related deferrals as well as the gap between Azul’s contractual lease rates and agreed-upon current market rates. In exchange, lessors will receive a tradeable note maturing in 2030 and equity priced in a way to reflect Azul’s new cash generation, improved capital structure, and reduced credit risk.
“Lessors represent 80% of our nominal gross debt. Reaching these agreements demonstrates tremendous success in our approach. The leasing community has recognized that supporting Azul is an intelligent, revenue-maximizing business decision, yet we are still honored and grateful for their valuable support. No aircraft have left the fleet throughout this negotiation, and in fact our partners have delivered 12 additional new aircraft to us over the past five months. Negotiations continue with lessors and other stakeholders such as OEMs, and we are very optimistic about reaching agreements with all of them,” said Alex Malfitani, Azul’s CFO.