By Don Nico Forbes
Shares in Azul rose after the company said it completed talks with existing bondholders to secure up to $500 million in funding, a welcome development as the Brazilian airline seeks to rein in a heavy debt pile.
Shares were up 10.7% in premarket trading at $3.09. The stock was down more than 70% year to date when the market closed last week.
The company said the agreement includes financing of $150 million to be received this week, $250 million expected before year end and an additional $100 million once other conditions are met.
Azul said the agreement also entails improving cash flow by more than $150 million by reducing certain lessors and OEMs obligations over the next 18 months and a collaborative effort to seek additional cash flow improvements of about $100 million per year.
The company added that it renegotiated 98% of its obligations with aircraft lessors and original equipment manufacturers.
The agreements could reduce the company's debt by more than $800 million, leading to an additional reduction of almost $100 million in interest payments per year, the airline said.
Azul said it expects a 15% increase in capacity in the fourth quarter, offering 3,048 extra flights over the Brazilian summer period.
Write to Don Nico Forbes at don.forbes@wsj.com
(END) Dow Jones Newswires
October 28, 2024 08:50 ET (12:50 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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