Azul Linhas Aéreas Brasileiras (AD, São Paulo Viracopos) has completed its financial restructuring after securing agreements with bondholders, lessors, and OEMs, it announced in regulatory filings. This eliminates nearly USD1.6 billion in debt from its balance sheet and raises an additional USD525 million.
The negotiations with lessors and OEMs resulted in the elimination of USD557 million in equity issuance obligations in exchange for 94 million new AZUL4 preferred shares.
Additionally, the carrier restructured its 2030 Lessor/OEM notes, converting a portion into new unsecured notes due in 2032, while securing options for interest payments in kind. These agreements also resulted in over USD300 million in additional cash flow improvements by the end of 2027.
Meanwhile, bondholders agreed to exchange part of their holdings for new 2029 and 2030 notes, some of which will be converted into preferred shares or exchanged for new interest-bearing instruments.
Through these agreements, Azul reduced its interest expenses by nearly BRL1 billion reais (USD170 million) in 2025 and beyond, and lowered its debt-to-EBITDA ratio from 4.8 times to 3.4 times.
Azul entered a major financial restructuring in 2024, opting for an out-of-court reorganisation rather than a Chapter 11 bankruptcy process in the United States as its Brazilian counterparts GOL Linhas Aéreas Inteligentes and LATAM Airlines Brasil have done in the past. In the process, it also reached an agreement with the Brazilian tax authorities to settle a BRL2.9 billion (USD493 million) tax debt.
