Brazilian airline Azul claimed a recent Bloomberg article was ""misleading"" and that is in ""active negotiations with its main stakeholders"" to improve its equity structure. The structure was agreed upon in its capital optimisation plan last year.
The Bloomberg report said Azul had been considering debt solutions such as an equity offering or a US chapter 11 filing. The report had cited people familiar with the matter. Following the report on August 28, 2024, Azul's stock plummeted to a record low. After issuing the statement, however, stock has seen a gradual uplift.
In a statement by Azul, it said: ""Azul always favours amicable, commercial solutions that maximize value to all of its stakeholders.""
The company added that stakeholders were ""generally supportive"" of its plans.
The airline posted a second quarter 2024 net loss of $703.6 million, amid a weakening exchange rate from Brazilian real to US dollar, along with declining capacity and growing fuel costs.
Azul held a total liquidity of $1.17bn. As of June 30, 2024, its immediate liquidity was $455.29 million after it paid $273.17 million in debt amortization and leases in the period. The company’s net debt at the end of the quarter was $4.48bn, up from $3.8bn at the end of the previous quarter. Its net debt to EBITDA ratio was 4.5x, compared to 3.7x in the preceding quarter.
The company argued it has additional cash-raising opportunities such as using its cargo division as collateral. It also noted that the Brazilian Congress had approved a bill on August 28, 2024, that allowed airlines to access recurring credit lines backed by the National Civil Aviation Fund (FNAC).
In addition, it is continuing to have discussions with Abra to explore potential partnerships and business combinations related to Gol Linhas Aereas of which Abra is a majority shareholder. It clarified that it has yet to enter into or formalised any agreement as discussions continue.
Azul says it favours ""commercial solutions"" over debt solutions to improve financial position
