(Bloomberg) -- Azul SA has inked a deal with its bondholders for up to $500 million in new financing, allowing a crucial deal to move forward with its lessors and parts suppliers that reduces the airline’s debt and boosts its cash position.

The deal allows for existing creditors to provide as much as $500 million in new senior secured debt, with $150 million to be provided this week and $250 million by the end of the year, according to a regulatory filing Monday. Another $100 million could be unlocked at a later date, Azul said. 

The agreement also eases some obligations the carrier has with lessors and parts suppliers in next 18 months, which should improve Azul’s cash flow by more than $150 million, it said. The parties also agreed on a “collaborative effort” to improve cash flow by $100 million per year. If that goal is reached, as much as $800 million of existing debt may be converted into shares, according to the filing. 

The company’s US-traded shares jumped as much as 11% premarket on the news. 

Azul, one of Latin America’s largest airlines, was struggling to shore up its balance sheet and deal with the impact of a weak Brazilian real, despite having renegotiated with lessors and carrying out a debt swap that pushed back maturities.

Bloomberg reported last week that the company was focused on negotiations with its bondholders to secure financing after attempts led by Jefferies Financial Group to to raise money with new investors hit a snag. 

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