Azul Raises US$650 Million, Suspends NYSE Listing Amid Chapter 11

Brazilian low-cost airline Azul has secured US$650 million in financial backing from select shareholders as part of a planned capital increase amid its ongoing Chapter 11 bankruptcy proceedings in the United States. The commitment is subject to approval by the US Bankruptcy Court.

On July 31, the airline announced it had signed a Backstop Commitment Agreement with participating shareholders to support a future capitalization transaction. “Debtors intend to file a motion seeking such approval and will notify the date on which it will be heard during the Chapter 11 process,” the company stated.

Azul voluntarily filed for Chapter 11 protection in late May to restructure more than US$2 billion in funded debt. The restructuring plan includes debtor-in-possession (DIP) financing of approximately US$1.6 billion and the potential to raise up to US$950 million in new capital upon emergence from bankruptcy.

On July 24, Azul obtained final court approval for its restructuring plan, including the DIP financing, allowing the company to maintain operations during the bankruptcy process. “Azul reaffirms its commitment to keeping stakeholders informed and ensuring a smooth travel experience throughout the restructuring process,” the airline stated.

As part of its broader efforts, Azul has entered into restructuring support agreements with key stakeholders, including major bondholders, its largest aircraft lessor AerCap, and airline partners United Airlines and American Airlines.

In recent weeks, the  company has taken additional steps to advance its restructuring. These include rejecting lease agreements for certain aircraft, suspending its listing on the New York Stock Exchange, and filing legal motions to secure continued fuel supply after a trustee attempted to halt deliveries.