Pinheiro Neto counsels Azul on its first debenture issuance
Pinheiro Neto Advogados has steered Azul S.A. on it $323 million issuance
Pinheiro Neto advised on the public offering of guaranteed secured debentures, convertible into preferred shares, of the first issuance of Azul S.A., under CVM Ruling No. 400, of December 29, 2003, each with a unit par value of R$1,000.00, on the issuance date. The issuance consisted of 1,745,900 debentures (including 145,900 additional debentures), corresponding to the total amount of R$1,745,900,000.00. The conversion price was R$32.2649 per preferred share, resulting in an initial conversion premium of 27.5% based on the Azul4 30 trading day volume-weighted average price (VWAP) of R$25.3058.
Azul Linhas Aéreas Brasileiras S/A (Azul Brazilian Airlines; or simply Azul) is a Brazilian carrier based in Barueri, a suburb of São Paulo. The company’s business model is to stimulate demand by providing frequent and affordable air service to underserved markets throughout Brazil. It was established on May 5, 2008, by Brazilian-born David Neeleman (founder of American low-cost airline JetBlue), with a fleet of 76 Embraer 195 jets. The airline began service on December 15, 2008.
According to Brazilian Civil Aviation Authority (ANAC), between January and December 2017 Azul had 17.8% of the domestic and 11.8% of the international market shares in terms of revenue passenger kilometres (RPK), making it the third-largest domestic and second largest international airline in Brazil. Azul Airlines is now one of the most profitable in the world. Azul’s income excluding interest, taxes and amortization, or EBITDA, was R$ 935.8 million, 24.4% higher, representing a margin of almost 31%. Net income, excluding the non-cash impact of exchange variation, totalled R$ 444.4 million, up 56.7% from July to September 2018.
Pinheiro Neto Advogados team was led by partners Ricardo Russo (pictured left), Guilherme Sampaio Monteiro (pictured centre), and Jorge Lopes (pictured right), and involved senior associates Rafael Gaspar, Camila M. Derisio, and Paula Rodrigues, associates Julia Barbosa Campos and Nina Goldman Cavalcanti, and legal assistant Gabriela Kaneshiro Pereira.
