Business

Brazilian Azul sells TAP's equity stake to Portuguese government

The deal will allow a capital injection in TAP Airlines amid the pandemic

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  • Azul said that all other contractual conditions remain;
  • The transaction depends on Azul’s corporate approval.

The Brazilian airline Azul announced an agreement with the Portuguese government to divest from its stake in Portuguese airline TAP. The company has sold its indirect 6% stake for nearly $12.15 million (BRL 65 million).

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As many other airlines worldwide, TAP has been severely impacted by the Covid-19 crisis. With the aid provided by the Portuguese government we are able to ensure the continuation of TAP thereby guaranteeing the integrity of our bond.

John Rodgerson, CEO at Azul, on investor’s page

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The deal with Portugal’s government will allow a capital injection in TAP Airlines. With it, Azul will not exercise rights to convert 90 million euros bonds maturing in 2026 into equity. The principal amount plus accrued interest of the bond corresponds to nearly $127 million (BRL 680 million), says Azul. The transaction remains subject to Azul’s required corporate approvals, including shareholders’ approval at an extraordinary shareholders meeting.