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UPDATE 2-Brazil airline Azul not weighing Chapter 11, CEO says
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UPDATE 2-Brazil airline Azul weighing Chapter 11, CEO says

Rewrites throughout with remarks from CEO

By Gabriel Araujo

- Azul AZUL4.SA is planning on filing for Chapter 11 bankruptcy protection, the Brazilian airline's CEO told Reuters, contradicting reports which caused the carrier's shares to on Thursday.

Bloomberg reported on Wednesday Azul was considering options ranging from an equity offering to filing for Chapter 11 in the United States in order to address its debt obligations.

The report was "misinterpreted," the company responded in a filing, as its Brazil-listed shares sank 24%.

CEO John Rodgerson said in an interview that Azul was financially healthy and in "friendly " with its partners, including aircraft lessors, due to the depreciation of Brazil's real.

The real has weakened around 14% against the U.S. dollar so far this year.

A of Latin American airlines have undergone Chapter 11 bankruptcy proceedings after the COVID-19 pandemic disrupted travel, including Aeromexico, LATAM Airlines LTM.SN and most recently Azul's direct competitor in Brazil, Gol GOLL4.SA.

Azul said on Thursday it was in "active talks" with stakeholders as part of a previously announced plan to overhaul its equity structure.

It added that options included a structure to use its cargo business as collateral for up to $800 million, which had already been set up.

Azul could also tap into credit links from the development bank, it said.

After the filing, Azul's shares briefly trimmed their losses to about 18%, but closed on Thursday down 24%. They are down 70% so far this year.


(Reporting by Gabriel Araujo; additional reporting by Andre Romani; Editing by Aida Pelaez-Fernandez, Kylie Madry and Marguerita Choy)

((Andre.Romani@thomsonreuters.com; 11 991314109;11 56447500;))

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