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Azul S.A. (B3:AZUL4; OTC:AZULQ) announced Monday that it has entered into an agreement with the Official Committee of Unsecured Creditors and an ad hoc group of secured noteholders as part of its ongoing Chapter 11 restructuring proceedings in the United States. The information is based on a press release statement filed with the U.S. Securities and Exchange Commission.
Under the terms of the agreement, general unsecured creditors classified under the company’s reorganization plan will have the option to receive their proportional share of up to $20 million in cash or an interest in a trust established for their benefit. The trust, known as the GUC Trust, will be funded with warrants exercisable at an equity value of $3.8 billion for up to 5.5% of Azul’s equity upon emergence from restructuring. The trust will also receive rights to three annual payments of up to $6.5 million each, contingent on Azul achieving certain financial performance targets at the end of 2027, 2028, and 2029. Additionally, between $2.5 million and $5 million will be allocated for trustee and administrative expenses.
The amount of warrants contributed to the GUC Trust will be reduced if general unsecured creditors opt for a cash recovery instead of an interest in the trust. The agreement also provides for the creation of a convenience class under the plan.
Azul has filed a revised version of its reorganization plan and disclosure statement with the United States Bankruptcy Court for the Southern District of New York. The disclosure statement outlines the treatment of various creditor classes and is intended to help creditors make informed decisions on the plan.
Azul stated it will continue to keep stakeholders informed of developments in the restructuring process in accordance with applicable regulations. The company’s restructuring support agreements were originally entered into on May 28, 2025, with financial creditors and strategic partners.
Azul operates in the scheduled air transportation sector and is based in Barueri, São Paulo, Brazil.
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