United and American Airlines invest 169 million in Azul for restructuring

The airlines United Airlines and American Airlines committed to injecting 200 million dollars (around 169 million euros) into the Brazilian Azul as part of the implementation of the restructuring plan.

According to information released on Monday, each company will contribute 100 million dollars (around 84 million euros) to support the execution of the plan and the company’s operations after exiting the “Chapter 11” process.

In the case of United Airlines, its contribution will be made in the context of the latest public offering of shares, whose settlement is scheduled for February 20, while that of American Airlines will be completed through the subscription of ‘warrants’ (share purchase options).

The effective and full exercise of the warrants by American Airlines is subject to compliance with certain prior conditions established in the Warrants Subscription Agreement, including prior approval by the Brazilian competition authorities (CADE).

Furthermore, Azul closed an additional investment agreement with certain creditors that provides for capital contributions to the company in the amount of 100 million dollars (around 84 million euros), to be carried out in the context of the public share offering.

At the same time, and in the context of preparing for its exit from Chapter 11, Azul entered into stand-alone warrant underwriting agreements with United Airlines and a group of creditors.

If exercised, the investments of both United Airlines and the group of creditors could increase by up to 15 million dollars (around 12 million euros) in the first case and up to eight million euros in the second.

Even so, these ‘warrants’ will not confer on their holders any additional leadership rights or political rights beyond those arising from the Corporations Law.

The implementation of the investments provided for in the aforementioned instruments is subject to the fulfillment of certain preconditions, including, among others, the opening and closing of the period for the exercise of the preemptive right by the company’s current shareholders due to the issuance of the ‘warrants’, the date of entry into force of the restructuring plan, the conclusion of the public offering of shares or the obtaining of any regulatory approval that may be necessary.