(Image: iStock/tupungato)
A Azul (AZUL4) said that it is still in friendly negotiations with the Portuguese airline TAP for a debt of R$1.2 billion, shows a document sent to the market this Wednesday (2).
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The debt concerns a loan of EUR 90 million to TAP, due in March 2026. The operation is recognized as long-term financial investments in Azul's financial statements.
“Since TAP Portugal did not fully comply with all the clauses set out in the aforementioned loan, and in view of the recent news about a possible privatization of TAP, Azul hired a law firm in Portugal to assist it in conversations with TAP, which include the possibility of bringing forward the maturity of the debt”, he explains.
In TAP Portugal's balance sheet, this operation was recognized as debt, which was confirmed at a TAP meeting and by the National Civil Aviation Authority (ANAC), the Portuguese regulatory body.
In a recent interview, John Rodgerson, Azul's CEO, spoke about the charge. According to him, the debt cannot be converted into a share acquisition.
“We invested in TAP in 2016, to help capitalize the company. So, it is an old debt that is already recognized. TAP is thinking about being sold again, so with this sale, they have to pay that back”
Problems at Azul
Azul is experiencing turmoil on the stock market. Since the end of August, the market has been speculating about a possible judicial recovery from the company, which was denied.
The fact is that the airline renegotiates with creditors.
According to Exame, the expectation is that the operation to raise funds will take place by the end of October, while part of the market sees a private offering taking place only between April and May 2025.
Also according to the publication, the company has reached an agreement with 90% of the lessors and should reach 100% in the coming days. This step is important to unlock the company’s private capital increase.
Azul aims to convert the approximately US$600 million of debt with the lessors into shares, which would hold between 20% and 22% of the company's share capital, for an estimated value of R$30 per share, with the current The price of a canvas is around R$5.
In evaluating the XP Investimentosif confirmed, the movement is positive for Azul, representing an important source of upside for the shares in the short term.
“Limit shareholder dilution to 20-22% (implying a share issue at R$25.25-28.40/share), versus current implied dilution levels of ~58% (at R$5.10/share ), leads to a cut of ~R$1.8 billion in debt (~95% of current market value)”.
No, Azul takes 57%.