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Brazil airline Azul ready to raise capital after debt deals – CEO

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By Gabriel Araujo

SAO PAULO (Reuters) – Brazilian airline Azul is ready to raise additional capital, its chief executive said in an interview, after reaching deals with lessors and bondholders to postpone debts maturing in the near term under a broad restructuring plan.

John Rodgerson told Reuters the additional cash would help Azul to “grow again” as it plans to open new routes this year.

Azul launched on Tuesday exchange offers aimed at pushing bonds set to mature in 2024 and 2026 to 2029 and 2030, respectively, following a deal with aircraft lessors to give them equity and tradable debt in exchange for lower payments.

“Now, with all our debt renegotiated and moved forward, we are ready to raise new capital,” Rodgerson said. “No one wants to give you money to pay old creditors. They want to give you money to help you grow again.”

Azul is evaluating the market before providing details of any transaction, but the CEO said it could come “at any moment” and confirmed that loyalty program TudoAzul and its cash flow could be pledged as collateral.

Rodgerson had floated that possibility in a press conference earlier this year, following similar moves by U.S. carriers Spirit and Hawaiian, touting it as “much better” collateral than the airline itself.

As strong demand is set to drive record revenue this year, Azul plans to open 10 to 15 new routes in Brazil by year-end in addition to recently added international routes to Paris and Curacao, Rodgerson said.

“People like talking about the ‘sexy’ international routes but we see a lot more opportunities in Brazil,” he said. “You only have a flight to Paris because you’re also serving rural Pernambuco state.”

Shares of Azul have gained 70% year-to-date but are still well below their pre-pandemic highs. Rodgerson hopes the recently announced exchange offer will help remove an overhang on the stock.

(Reporting by Gabriel Araujo; Editing by Brad Haynes and Richard Chang)

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