Azul Seeks Court OK for $1.57B Chapter 11 Financing Plan
Azul Linhas Aéreas Brasileiras has requested approval from the U.S. Bankruptcy Court for the Southern District of New York to secure approximately USD1.57 billion in financing as part of its ongoing Chapter 11 restructuring process. The funding aims to support the airline’s operational recovery and debt refinancing.
The proposed financing package includes USD250 million already drawn through interim debtor-in-possession (DIP) loans, a final USD1.1 billion loan to repay various pre-petition debts, and up to USD221 million in contingent financing subject to specific conditions.
Azul plans to use the funds for working capital and refinancing obligations such as USD676 million in superpriority notes, USD113 million in bridge notes, USD46 million owed to aircraft lessor AerCap, and USD65 million in convertible debentures.
The Brazilian carrier filed for Chapter 11 earlier this year to restructure its balance sheet. Key milestones in the process include returning older aircraft, securing court approvals, and suspending trading on the New York Stock Exchange.
The official Creditors’ Committee has voiced support for the DIP financing, despite concerns over Azul’s inability to access USD321 million from the remaining USD421 million in loans. Azul also plans to use about USD900 million of the new funding to refinance pre-petition secured debt.
In response, the committee negotiated stronger oversight rights, including the ability to investigate pre-petition debt deals. It extended the challenge period from 60 to 75 days and increased its investigative budget from USD50,000 to USD225,000.
The committee stated the financing is vital to Azul’s liquidity and restructuring success.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com