Azul Linhas Aéreas has begun one of the central stages of its financial restructuring plan by launching a primary public offering of shares of up to R$ 7.4 billion. This offering was structured to promote the conversion of financial debt into equity participation.
The operation, which is being coordinated by UBS BB, comes after the approval, on Friday, December 12, of the airline's recovery plan by the United States courts, according to a relevant fact published after the market closed on Monday, December 22.
In the first stage, Azul will mandatorily capitalize debts related to senior notes issued by Azul Secured Finance, with maturities between 2028 and 2030 and coupons ranging from 10.87% to 11.5% per year.
The holders of these bonds will receive shares of the company - including in the form of ADRs - in exchange for the credits, waiving the interest accrued up to the conversion date.
The noteholders are organized into Azul 1L Creditors Entity and Azul 2L Creditors Entity, both based in the Cayman Islands, which will become shareholders in the company after the completion of the transaction, with a potentially significant impact on the shareholding structure.
A source familiar with the negotiations told NeoFeed that it will be a significant dilution for current shareholders and controlling shareholders. This first stage of the plan is expected to be finalized by January 6th.
"In this first stage, it's a debt swap. Then, in a second stage, there will be a capital injection into the company. And that will relieve Azul's financial strain," says this source.
The offering will be divided into two parts. The so-called priority offering will be aimed at current Azul shareholders, with subscriptions in minimum baskets of 1 million common shares or 10,000 preferred shares. The institutional offering will be aimed at professional investors, respecting the same standard lots.
The price per lot was set at R$ 135.2 million for common shares and R$ 101.4 million for preferred shares. Each subscribed share will entitle the holder to one free subscription bonus.
Converting debt into equity is just one aspect of the restructuring plan approved by the American court.
According to the company, the agreement involves a broad restructuring of liabilities, with a reduction in financial debt, extension of payment terms, and reorganization of the capital structure, creating the conditions for Azul to conclude its judicial reorganization process in 2026.
The plan also preserves the company's operational continuity, maintains strategic contracts, and provides predictability for management at a time when the airline sector still faces challenges related to costs, exchange rates, and financing.
A similar itinerary to that of Casas Bahia.
Azul's strategy follows a recent trend in the Brazilian market. Casas Bahia implemented a financial reset by combining debt renegotiation, new issuances, and the conversion of liabilities into capital instruments, with the goal of reducing leverage and gaining operational breathing room.
In the case of the retail chain, the debt-for-equity swap was part of a broader redesign of its financial structure, allowing it to extend maturities, reduce short-term cash pressure, and create room for business recovery.
Just as is happening now with Azul, the cost of this process was shareholder dilution, seen as a necessary price for the survival and reorganization of the companies.
Despite the financial restructuring process, Azul continues to operate a fleet of over 200 aircraft and serves more than 150 destinations in Brazil, in addition to international routes, transporting approximately 34 million passengers per year.
On the B3 stock exchange, AZUL4 shares have accumulated a 77.5% drop in value by 2025. Azul Linhas Aéreas' market capitalization is R$ 728.5 million.
