SÃO PAULO, June 13,
2023 /PRNewswire/ -- Azul S.A., "Azul," (B3: AZUL4,
NYSE: AZUL) ("Azul") today announced that its wholly-owned
subsidiary Azul Investments LLP (the "Existing Notes Issuer") has
commenced two separate offers to Eligible Holders (as defined
below) to exchange (such offers, the "Exchange Offers") (i) any and
all of the outstanding 5.875% Senior Notes due 2024 issued by the
Existing Notes Issuer (the "Existing 2024 Notes") for newly
issued 11.500% Senior Secured Second Out Notes due 2029 to be
issued by Azul Secured Finance LLP (the "New Notes Issuer") (the
"New 2029 Notes"), and (ii) any and all of the outstanding 7.250%
Senior Notes due 2026 issued by the Existing Notes Issuer (the
"Existing 2026 Notes" and, together with the Existing 2024 Notes,
the "Existing Notes") for newly issued 10.875% Senior Secured
Second Out Notes due 2030 to be issued by the New Notes Issuer (the
"New 2030 Notes," and together with the New 2029 Notes, the "New
Notes"), pursuant to the terms and subject to the conditions set
forth in the confidential exchange offering memorandum and
consent solicitation statement, dated June
13, 2023 in respect of the Exchange Offers and Solicitations
(as defined below) (the "Offering Memorandum").
The New Notes will be guaranteed by Azul and its subsidiaries
Azul Linhas Aéreas Brasileiras S.A. ("Azul Linhas"), IntelAzul S.A.
and ATS Viagens e Turismo Ltda., as well as Azul IP Cayman
Holdco Ltd. and Azul IP Cayman Ltd, which will be incorporated
prior to the first Settlement Date (together, the "Guarantors").
The New Notes will be secured by certain assets and rights, as
described in the Offering Memorandum.
Any capitalized terms used in this press release without
definition have the respective meanings assigned to such terms in
the Offering Memorandum.
CUSIP /ISIN
Numbers
|
Title of
Security
|
Principal
Amount
Outstanding
|
Exchange
Consideration(1)
|
Early Exchange
Premium(1)(2)
|
Total Early
Exchange
Consideration(1)
|
CUSIP: 05502FAA6 /
U0551UAA1
ISIN: US05502FAA66
/
USU0551UAA17
|
5.875% Senior
Notes due 2024
|
US$400,000,000
|
US$950.00 in
principal amount
of New 2029
Notes
|
US$50.00 in
principal amount
of New 2029
Notes
|
US$1,000.00 in
principal amount
of New 2029
Notes
|
CUSIP: 05502FAC2
/ U0551UAB9
ISIN: US05502FAC23
/
USU0551UAB99
|
7.250% Senior
Notes due 2026
|
US$600,000,000
|
US$950.00 in
principal amount
of New 2030
Notes
|
US$50.00 in
principal amount
of New 2030
Notes
|
US$1,000.00 in
principal amount
of New 2030
Notes
|
(1) The New Notes
Issuer will issue New Notes in the minimum denomination of
US$175,000 and integral multiples of US$1.00 in excess thereof. For
the avoidance of doubt, no cash will be paid for fractional New
Notes not received due to rounding. The Existing Notes Issuer will
pay in cash accrued and unpaid interest, if any, on the Existing
Notes from the last payment date for the Existing Notes of the
relevant series, up to, but not including, the applicable
Settlement Date (as defined below). If the Existing Notes Issuer
elects to have an Early Settlement Date (as defined below) in
respect of Existing Notes of a series, the interest commencement
date for the New Notes of the relevant series shall be such Early
Settlement Date. Therefore, any such New Notes issued by the New
Notes Issuer on the applicable Final Settlement Date (as defined
below) will be issued by the New Notes Issuer with accrued and
unpaid interest from such Early Settlement Date. Accordingly, the
amount of accrued and unpaid interest that has accrued on such New
Notes to, but excluding, the applicable Final Settlement Date will
be deducted, but not below zero, from the cash payable in respect
of accrued and unpaid interest, if any, on the Existing Notes of
the relevant series exchanged on the applicable Final Settlement
Date.
|
(2) Eligible Holders
who validly tender Existing Notes of a series after the Early
Participation Deadline (as defined below) but on or before the
Expiration Deadline (as defined below) will not be eligible to
receive the Early Exchange Premium for such series validly tendered
and not validly withdrawn.
|
Simultaneously with the Exchange Offers, the Existing Notes
Issuer is conducting (i) a solicitation (the "2024 Solicitation")
of consents (the "2024 Consents") from Eligible Holders of the
Existing 2024 Notes to effect certain proposed amendments (the
"2024 Proposed Amendments") to the indenture dated as of
October 26, 2017, under which the
Existing 2024 Notes were issued (the "2024 Notes Indenture"), and
(ii) a solicitation (the "2026 Solicitation" and, together with the
2024 Solicitation, the "Solicitations") of consents (the "2026
Consents" and, together with the 2024 Consents, the "Consents")
from Eligible Holders of the Existing 2026 Notes to effect certain
proposed amendments (the "2026 Proposed Amendments" and, together
with the 2024 Proposed Amendments, the "Proposed Amendments") to
the indenture dated as of June 15,
2021, under which the Existing 2026 Notes were issued (the
"2026 Notes Indenture" and, together with the 2024 Notes Indenture,
the "Existing Notes Indentures"). The Proposed Amendments with
respect to each Existing Notes Indenture would, among other things,
eliminate substantially all of the restrictive covenants, events of
default and related provisions contained in such Existing Notes
Indenture. Eligible Holders may not tender their Existing
Notes for exchange pursuant to the applicable Exchange Offer
without delivering their Consents pursuant to the applicable
Solicitation, and Eligible Holders may not deliver their Consents
pursuant to the applicable Solicitation without tendering their
Existing Notes pursuant to the applicable Exchange Offer. The
valid tender of Existing Notes of a series by an Eligible Holder
pursuant to the relevant Exchange Offer will be deemed to
constitute the giving of a Consent by such Eligible Holder to the
Proposed Amendments of the Existing Notes Indenture applicable to
such series.
Azul has entered into a Transaction Support Agreement (the
"Transaction Support Agreement") dated June
13, 2023, between the New Notes Issuer, the Guarantors and
an ad hoc group of holders of Existing Notes (the "Supporting
Noteholders"). Subject to the terms and conditions set forth in the
Transaction Support Agreement, the Supporting Noteholders have
agreed to tender their Existing Notes in the Exchange Offers and
deliver Consents to the Proposed Amendments prior to the Early
Participation Deadline. The Supporting Noteholders represent 65.5%
of the aggregate principal amount of the Existing 2024 Notes and
65.8% of the aggregate principal amount of the Existing 2026 Notes
outstanding as of the date of this press release. The consent of
Supporting Noteholders suffices to approve the Proposed Amendments
in respect of the Existing Notes of each series.
Each Exchange Offer and Solicitation is a separate offer, and
each Exchange Offer and Solicitation may be individually amended,
extended, terminated or withdrawn without amending, extending,
terminating or withdrawing any other Exchange Offer or
Solicitation, at any time prior to the Expiration Deadline and for
any reason. As described in the Offering Memorandum, the New
Notes will constitute Second Priority Secured Obligations and will,
pursuant to the Intercreditor Agreement, be secured on a "second
out" basis by security interests in the Collateral.
Important Dates and Times
Commencement:
|
June
13, 2023
|
Withdrawal
Deadline:
|
5:00 p.m., New York
City time, on June 27,
2023, unless
extended with respect to any Exchange Offer or
Solicitation
|
Early Participation
Deadline:
|
5:00 p.m., New York
City time, on June 27,
2023, unless
extended with respect to any Exchange Offer or
Solicitation
|
Expiration
Deadline:
|
11:59 p.m., New York
City time, on July 12,
2023, unless
extended with respect to any Exchange Offer or
Solicitation
|
Early Settlement
Date:
|
If the Existing Notes
Issuer elects to have an Early Settlement
Date in respect of Existing Notes of a series, the
Early Settlement
Date will be determined at the Existing Notes Issuer's
option and announced by the Existing Notes Issuer, subject to
all conditions
to the applicable Exchange Offer having been satisfied or
waived
by the Existing Notes Issuer, any time on or after
the Early
Participation Deadline and prior to the Final Settlement
Date
|
Final Settlement
Date:
|
Expected to be July 17,
2023 (the third business day following the
Expiration Deadline), unless extended with respect to any
Exchange Offer
|
Upon the terms and subject to the conditions set forth in the
Offering Memorandum, Eligible Holders who validly tender Existing
Notes and deliver related Consents at or prior to 5:00 p.m.,
New York City time, on
June 27, 2023, unless extended by the
Existing Notes Issuer (such date and time as they may be extended,
the "Early Participation Deadline") and who do not validly withdraw
tendered Existing Notes and do not revoke such Consents at or prior
to 5:00 p.m., New York City time, on June 27, 2023, unless extended by the Existing
Notes Issuer (such date and time, as they may be extended, the
"Withdrawal Deadline"), and whose Existing Notes are accepted for
exchange by the Existing Notes Issuer, will receive the applicable
Total Early Exchange Consideration, which will be payable in the
forms of consideration described below.
The "Total Early Exchange Consideration" for any Existing 2024
Notes and Existing 2026 Notes whose tenders are accepted for
exchange by the Existing Notes Issuer will consist of New 2029
Notes to be issued by the New Notes Issuer and New 2030 Notes to be
issued by the New Notes Issuer, respectively, in an aggregate
principal amount set forth in the above table, which includes the
"Early Exchange Premium" for Existing Notes set forth in the above
table.
Upon the terms and subject to the conditions set forth in the
Offering Memorandum, Eligible Holders who validly tender Existing
Notes and deliver related Consents after the Early Participation
Deadline but at or prior to 11:59
p.m., New York City time,
on July 12, 2023, unless extended or
earlier terminated by the Existing Notes Issuer (such date and
time, as they may be extended, the "Expiration Deadline"), and
whose Existing Notes are accepted for exchange by the Existing
Notes Issuer, will receive the applicable Total Early Exchange
Consideration minus the applicable Early Exchange Premium
(the "Exchange Consideration").
Upon the terms and subject to the conditions of the relevant
Exchange Offer, the settlement date for an Exchange Offer will
occur promptly after the applicable Expiration Deadline (the "Final
Settlement Date"). If, at any time on or after the Early
Participation Deadline, all conditions have been satisfied or
waived by the Existing Notes Issuer, the Existing Notes Issuer may
elect, in its sole discretion, to settle an Exchange Offer for
Existing Notes of the relevant series validly tendered (and not
validly withdrawn) prior to the Early Participation Deadline for
such Exchange Offer at any time after the Early Participation
Deadline and prior to the applicable Expiration Deadline (the
"Early Settlement Date" and, together with the Final Settlement
Date, each a "Settlement Date").
If the Existing Notes Issuer elects to have an Early Settlement
Date in respect of Existing Notes of a series, the Early Settlement
Date will be determined at the Existing Notes Issuer's option and
announced by the Existing Notes Issuer. The Final Settlement Date
is expected to be July 17, 2023
unless extended by the Existing Notes Issuer (at its sole option),
which is the third business day following the Expiration
Deadline.
In addition to the applicable Total Early Exchange Consideration
or applicable Exchange Consideration, as applicable, Eligible
Holders whose Existing Notes are accepted for exchange by the
Existing Notes Issuer will be paid in cash the accrued and unpaid
interest, if any, from the last payment date for the Existing Notes
of the relevant series up to, but not including, the applicable
Settlement Date for such Existing Notes that are validly tendered
and accepted for exchange by the Existing Notes Issuer on the
applicable Settlement Date.
If the Existing Notes Issuer elects to have an Early Settlement
Date in respect of Existing Notes of a series, the interest
commencement date for the New Notes of the relevant series shall be
such Early Settlement Date. Therefore, any such New Notes issued by
the New Notes Issuer on the applicable Final Settlement Date will
be issued by the New Notes Issuer with accrued and unpaid interest
from such Early Settlement Date. Accordingly, the amount of accrued
and unpaid interest that has accrued on such New Notes to, but
excluding, the applicable Final Settlement Date will be deducted,
but not below zero, from the cash payable in respect of accrued and
unpaid interest, if any, on the Existing Notes of the relevant
series exchanged on the applicable Final Settlement Date.
The obligation of the Existing Notes Issuer to complete an
Exchange Offer and related Solicitation with respect to either
series of Existing Notes is subject to certain conditions described
in the Offering Memorandum (the "Conditions"), which include, (i)
with respect to the 2024 Notes, the receipt of 2024 Notes validly
tendered (and not validly withdrawn) prior to the Expiration
Deadline representing not less than 70% of the aggregate principal
amount of 2024 Notes outstanding and, with respect to the 2026
Notes, the receipt of Existing Notes validly tendered (and not
validly withdrawn) prior to the Expiration Deadline representing
not less than 70% of the aggregate principal amount of Existing
Notes outstanding, (ii) certain amendments to the indenture
(escritura de emissão de debêntures) governing the
convertible debentures issued by Azul and certain collateral and
other documents are required to be amended or replaced in respect
of such convertible debentures, (iii) certain amendments to the
forbearance agreement entered into between Azul Linhas, as lessee,
and certain lessors of aircraft (the "Relevant Lessors"), and to
the global partial deferral agreement entered into between Azul
Linhas, as lessee, Azul, as guarantor, and the Relevant Lessors,
and the related collateral and other documents are required to be
replaced, (iv) the obtaining by Azul and certain of its
subsidiaries of waivers and amendments from their creditors to
certain financings agreements and arrangements entered into in the
ordinary course of their business with certain financial
institutions, and (v) certain other customary conditions. Certain
of these conditions are subject to waiver by Azul.
Pursuant to the terms of each Existing Notes Indenture, the
Proposed Amendments require the written consent of holders of a
majority in aggregate principal amount of the relevant series of
outstanding Existing Notes issued under the relevant Existing Notes
Indenture. At any time after the applicable Withdrawal Deadline and
before the applicable Final Settlement Date (or the Early
Settlement Date, if the Existing Notes Issuer elects to have
an Early Settlement Date in respect of Existing Notes of a series),
upon receipt of valid Consents sufficient to effect the Proposed
Amendments with respect to Existing Notes of a series, the Existing
Notes Issuer and the relevant Existing Notes Trustee under
the applicable Existing Notes Indenture may execute and
deliver a supplemental indenture relating to the Proposed
Amendments with respect to the applicable Existing Notes Indenture
immediately giving effect to such Proposed Amendments.
Neither the Existing Notes Issuer nor the New Notes Issuer will
receive any cash proceeds from the Exchange Offers or the issuance
of the New Notes to be issued by the New Notes Issuer in the
Exchange Offers. The Existing Notes acquired by the Existing Notes
Issuer pursuant to the Exchange Offers will be cancelled and will
not be reissued.
The New Notes are being offered for exchange only (a) in
the United States to holders of
Existing Notes who are reasonably believed to be "qualified
institutional buyers" (as defined in Rule 144A under the Securities
Act of 1933, as amended (the "Securities Act")) in reliance upon
the exemption from the registration requirements of the Securities
Act, and (b) outside the United
States to holders of Existing Notes who are persons other
than "U.S. persons" (as defined in Rule 902 under the Securities
Act) in reliance upon Regulation S under the Securities Act. In
addition, the New Notes may not be transferred to or held by a
Competitor.
Only holders of Existing Notes who have properly completed and
submitted the eligibility certification in electronic form (the
"Eligible Holders") are authorized to receive and review the
Offering Memorandum. Only Eligible Holders that also comply with
the other requirements set forth in the Offering Memorandum are
eligible to participate in the Exchange Offers and the
Solicitations. Holders who desire to obtain and complete an
eligibility certification should either visit the website for this
purpose at https://gbsc-usa.com/eligibility/azul or contact Global
Bondholder Services Corporation, the Exchange Agent and the
Information Agent in connection with the Exchange Offers and the
Solicitations. Requests for documentation and questions regarding
the Exchange Offers and the Solicitations can be directed to Global
Bondholder Services Corporation at +1 (212) 430-3774 (banks and
brokers) and +1 (855) 654–2014 (toll free).
This press release does not constitute an offer to buy or the
solicitation of an offer to sell the Existing Notes in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction. This press release does
not constitute an offer to sell or the solicitation of an offer to
buy the New Notes, nor shall there be any sale of the New Notes in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction. The New Notes will not be
registered under the Securities Act or the securities laws of any
state and may not be offered or sold in the United States absent registration or an
exemption from the registration requirements of the Securities Act
and applicable state securities laws. The Exchange Offers and
Solicitations are being made only pursuant to the Offering
Memorandum and only to such persons and in such jurisdictions as is
permitted under applicable law.
None of the Existing Notes Issuer, the New Notes Issuer, the
Guarantors, any of their respective directors or officers, the
Dealer Managers, the Financial Advisor, the Exchange Agent, the
Information Agent, or the Trustees, or in each case, any of their
respective affiliates, makes any recommendation as to whether
Eligible Holders should tender or refrain from tendering all or any
portion of the Existing Notes in response to any of the Exchange
Offers, or deliver Consents in response to the Solicitations.
Eligible Holders will need to make their own decision as to whether
to tender Existing Notes in the Exchange Offers and participate in
the Solicitations and, if so, the principal amount of Existing
Notes to tender.
This press release is being issued pursuant to and in accordance
with Rule 135c under the Securities Act.
Cautionary Statement Regarding
Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act, Section 21E of
the Securities Exchange Act of 1934, as amended. All statements
other than statements of historical facts included in this press
release, and those statements preceded by, followed by or that
otherwise include the words "may," "might," "will," "aim," "would,"
"could," "should," "believe," "understand," "expect," "anticipate,"
"intend," "estimate," "project," "target," "goal," "guidance,"
"budget," "plan," "objective," "potential," "seek," or similar
expressions or variations on these expressions are forward-looking
statements. Azul and its subsidiaries can give no assurances that
the assumptions upon which the forward-looking statements are based
will prove to be correct or that, even if correct, intervening
circumstances will not occur to cause actual results to be
different than expected. Because forward-looking statements are
subject to risks and uncertainties, actual results may differ
materially from those expressed or implied by the forward-looking
statements. There are a number of risks, uncertainties and other
important factors that could cause the actual results of Azul and
its subsidiaries to differ materially from the forward-looking
statements, including, but not limited to, the form and results of
the Exchange Offers and Solicitations; the satisfaction or waiver
of the Conditions; and those factors set out in the Offering
Memorandum under "Risk Factors", in Azul's annual report on Form
20-F for the year ended December 31,
2022 under "Risk Factors", and in Azul's other filings with
the U.S. Securities and Exchange Commission. Although Azul and its
subsidiaries believe the expectations reflected in the
forward-looking statements are reasonable, Azul and its
subsidiaries cannot guarantee future results, level of activity,
performance or achievements. Moreover, neither Azul nor any other
person assumes responsibility for the accuracy or completeness of
any of these forward-looking statements. Eligible Holders should
not rely upon forward-looking statements as predictions of future
events. The information included herein is given as of the date of
this press release and, except as otherwise required by the
applicable law, Azul and its subsidiaries disclaim any obligation
or undertaking to publicly release any updates or revisions to, or
to withdraw, any forward-looking statement contained in this press
release to reflect any change in Azul's and its subsidiaries'
expectations with regard thereto or any change in events,
conditions or circumstances on which any forward-looking statement
is based.
About Azul
Azul is the largest airline in Brazil in terms of departures and cities
served, with around 1,000 daily departures to 158 destinations,
creating an unparalleled network of more than 300 non-stop routes
as of December 31, 2022. For more
information visit https://ri.voeazul.com.br. Information on Azul's
website does not constitute a part of this press release.
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SOURCE Azul S.A.