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SAO PAULO, March 5 (Reuters) – Brazilian airline Azul SA AZUL4.SA said late on Sunday it had reached agreements with aircraft lessors responsible for 90% of its obligations that would give them equity and tradeable debt in exchange for lower payments.
Azul said the deal included lessors eliminating payment deferrals dating back to the COVID-19 pandemic as well as the gap between its contractual lease rates and current market rates.
The airline will issue a tradeable note due in 2030 and equity to the lessors that is priced to reflect its improved cash generation, capital structure and reduced credit risk, it said.
Azul did not name the lessors involved or provide further details of the equity pricing.
“Reaching these agreements demonstrates tremendous success in our approach,” Azul Chief Financial Officer Alex Malfitani said in a statement.
“Negotiations continue with lessors and other stakeholders such as OEMs (equipment manufacturers), and we are very optimistic about reaching agreements with all of them,” he added.
($1 = 5.1956 reais)
(Reporting by Gabriel Araujo; Additional reporting by Peter Frontini; Editing by Jamie Freed)
((Gabriel.Araujo2@thomsonreuters.com; +55 11 5047-3352;))
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