Azul Launches $1.3bn Share Offering to Fund Debt Restructuring
Brazilian carrier Azul Linhas Aéreas Brasileiras has launched a major primary share offering aimed at raising up to BRL 7.4 billion (USD 1.3 billion) as part of its ongoing financial restructuring under Chapter 11 bankruptcy protection in the United States. The proceeds will be used primarily to settle outstanding debts and strengthen the airline’s balance sheet as it works toward a sustainable recovery.
In a notice to financial markets, Azul said it plans to issue approximately 724 billion new preferred shares alongside an equal number of ordinary shares. The dual-class structure is designed to provide flexibility in attracting capital while maintaining voting balance among shareholders during the restructuring process. Existing shareholders will be granted priority subscription rights, allowing them to participate in the offering on a pro rata basis and limit dilution of their holdings.
Under the terms outlined by the company, preferred shares will be offered in lots of 10,000, with each allotment priced at BRL 101.45 (USD 18.30). Ordinary shares will be sold in larger blocks of one million shares, priced at BRL 135.27 (USD 24.40) per block, according to details reported by Reuters. The pricing reflects the airline’s effort to balance investor appeal with the need to raise substantial capital in a challenging market environment.
The equity raise follows a key legal milestone earlier in December, when a US bankruptcy court approved Azul’s debt restructuring plan. That decision cleared the way for the airline to eliminate more than USD 2 billion in debt, significantly reducing its financial obligations and improving long-term viability. The approved plan also allows Azul to raise fresh capital through the current rights offering and secure strategic investments from American Airlines and United Airlines, both of which are existing partners.
Azul entered Chapter 11 proceedings to address mounting liabilities stemming from aircraft leases, pandemic-era borrowing, and currency pressures. The restructuring is designed to preserve operations while reshaping the airline’s capital structure, rather than pursuing liquidation. The carrier continues to operate its domestic and international network from its main hub at São Paulo Viracopos International Airport, maintaining service levels during the court-supervised process.
If fully subscribed, the BRL 7.4 billion offering would mark one of the largest equity raises by a Latin American airline in recent years. For Azul, the transaction represents a critical step toward exiting Chapter 11 with lower debt, improved liquidity, and backing from major global airline partners. The success of the offering will be closely watched by investors and industry observers as a test of confidence in Azul’s long-term recovery strategy.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com