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Blue S.A., the leading airline Brazil, has initiated a proactive financial reorganization under the Chapter 11 in the U.S.
It is important to indicate that, This strategic move seeks to strengthen its financial future and is not a sign of operational problems.
The company has signed Restructuring Support Agreements with key partners such as its bondholders, AerCap (Your greatest lessor) and the airlines United and American Airlines. These agreements seek significant deleveraging and generation of positive cash flow.
The most important: Blue will continue to fly normally. The flights, customers, crew members and commitments will be maintained throughout the process.
John Rodgerson, CEO of Blue, He stated that these agreements mark a crucial step to “emerge as leaders in the sector.”, optimizing its capital structure impacted by the pandemic and supply chain problems.
Azul enters Chapter 11
The Chapter 11 is a legal process that allows companies to restructure their balance sheet while continuing to operate. Blue will use it to:
- Remove approximately $2 one billion debt.
- Reduce lease obligations.
Optimize your fleet.
The objective is to emerge from the process with greater flexibility and a more sustainable financial structure..
A unique and supported approach
Unlike other restructurings in the region, Blue It already has previous agreements with its key partners. This includes a DIP funding commitment (Debtor in Possession) about $1.6 billion, that will inject $670 millions of new capital to reinforce liquidity.
At the end, The DIP financing will be paid with a Share Rights Offering of up to $650 millions, backed by partners, plus an additional capital investment of up to $300 millions of United Airlines and American Airlines.
Both airlines, through its executives, They have expressed their trust and commitment to the future of Blue, highlighting your leadership in Brazil and its unique route network.
Blue has presented requests before the Court to guarantee the continuity of the operations, including salaries and crew benefits, Faithful blue tickets and benefits for customers, and payments to critical suppliers.
John Rodgerson concluded: «We will emerge from this process even stronger and better positioned to continue connecting Brazil like no other airline and offering the best service and value to Customers».
This restructuring is a proactive and strategic step to ensure a prosperous future for Blue.
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