Embraer to Get US$413 million Financing for Production, Exports

Brazilian planemaker Embraer informed that the country’s state development bank BNDES approved a R$2.2 billion (US$413.15 million) credit line to finance the company’s commercial aircraft production and exports.

“The longevity of the partnership between Embraer and BNDES illustrates the strength of this relationship that stimulates Brazilian exports and benefits society. Together with other actions that we are carrying out with Brazilian and international financial institutions, this operation reinforces our credibility for access to financial resources that will contribute to executing our growth plan,” said Antonio Carlos Garcia, CFO, Embraer.

The move came about five weeks after Embraer announced a US$650 million revolving credit facility with a group of national and foreign financial institutions. BNDES had recently also agreed to fund exports of six Embraer E-175 jets to US-based carrier SkyWest. The current financing consummation is subject to the fulfillment of previous conditions established by BNDES and the execution of the respective contract, among other conditions, said the planemaker.

“Credit operations are important for the resumption of aircraft production by Embraer at pre-COVID-19 pandemic levels and reinforce the strategic partnership between BNDES and Embraer started in 1997, consolidating BNDES’ support to the aeronautical industry and the export of Brazilian aircraft,” said Bruno Aranha, Director, BNDES.

BNDES has financed about US$25 billion of Embraer’s aircraft exports since 1997, when it began supporting the planemaker. The relationship has enabled the export of over 1,275 Embraer aircraft to airlines around the world. “During the period, the contracted operations enabled the Brazilian manufacturer to compete in the foreign market on equal terms with its competitors,” according to Embraer.

BNDES is the main instrument used by Brazil’s Federal Government to promote long-term investments in the country. The bank’s actions are focused on positive socio-environmental and economic impacts in Brazil.

Embraer Narrows 3Q22 Net Loss

Embraer reported a narrower 3Q22 net loss and boosted its free cash flow outlook for the full year, while recognizing that annual deliveries were likely to stay at the lower end of its forecast, reported Reuters.

During 3Q22, Embraer delivered 10 commercial jets and 23 executive jets, bringing year to date deliveries to 27 commercial jets and 52 executive jets, the planemaker reported: “Although deliveries have been back ended to 4Q22 due to supply chain challenges in 2022, they are close to historical average for the quarter.”

According to the company, there are over 2,500 commercial Embraer aircraft flying all over the world. In Mexico, Aeroméxico Connect’s entire fleet is made up of Embraer 190, with 44 planes travelling to 44 local destinations, 11 in the US and 5 in Central America and the Caribbean. The other 7 Embraer airplanes (ERJ145ER) in Mexico belong to TAR Aerolíneas.