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Brazilian airline Azul receives bankruptcy court approval for debt restructuring

A U.S. bankruptcy court judge approved Azul’s debt restructuring on Friday, allowing it to reduce more than $2 billion of debt and raise capital via a new equity right offering and investment from American Airlines and?United?Airlines.

At a hearing in White Plains (New York), U.S. Bankruptcy judge Sean Lane approved Azul’s?bankruptcy plans.

Azul filed Chapter '11 bankruptcy in New York, in May. Its goal was to reduce its debts and to make its business more resistant to market challenges such as fluctuations in fuel prices and currency exchange rate.

The bankruptcy plan of the company converts much of its existing debt into equity, and allows it to raise money by selling new equity shares.

United and American have agreed to invest up to $300 million in Azul equity as part of the bankruptcy.

(source: Reuters)