Azul has approved a primary public offering of newly issued common and preferred shares in Brazil to support its ongoing Chapter 11 restructuring in the US.
The board green-lit the offer at a meeting on December 22, with existing shareholders granted priority subscription rights and any unsubscribed shares to be allocated to professional investors.
The move will also include a private placement of American Depositary Receipts (ADRs) and warrants abroad for certain creditor entities.
ADR holders will not be entitled to participate unless qualifying as professional investors under applicable Brazilian regulations.
The offering is not registered in the US and is part of mandatory debt equitisation under the restructuring plan.
Earlier this month, a US bankruptcy court approved Azul’s Chapter 11 reorganisation plan, which the airline said received “overwhelming support” from voting creditors.
The plan is expected to eliminate more than $2bn of debt and convert the majority of remaining obligations into equity through a series of public offerings, backed by agreements with key stakeholders including AerCap, United Airlines, and American Airlines.
Under the plan, first-lien creditors are expected to hold around 97% of the equity and second-lien creditors about 3%, before any new capital raising.