Azul S.A. («Azul” or “Company”) (B3: AZUL4; OTC: AZULQ), in line with previous disclosures, provides its shareholders and the market in general with updates and consolidates key information regarding the voluntary restructuring process in the United States of America (“United States”), under Chapter 11 of the United States Bankruptcy Code (the “Chapter 11”), before the United States Bankruptcy Court – Southern District of New York, in the State of New York (the “Court”), with the purpose of ensuring transparency and consistency in monitoring the developments of the process.
Plan Confirmation
The Company announces that the Plan received overwhelming support from all voting creditors, and in a hearing held today, the Court approved the Company’s reorganization plan, marking the successful completion of a key procedural milestone in the Chapter 11 process This decision reinforces the overall consistency of the proposed restructuring, enabling the Company to advance to the next phases of implementation in accordance with the terms previously disclosed. The Company will continue to keep the market informed about subsequent developments, in line with applicable regulations.
By way of background, the Company has been conducting, over the past several months, the restructuring process contemplated under the Chapter 11 plan, which sets forth the terms for reorganizing its financial and operational obligations. During this period, the Company has completed several key procedural steps, including the determination of creditor classes, the distribution of voting materials, and the implementation of the solicitation mechanics, all as previously disclosed to the market. The Plan confirmation represents another milestone within this previously disclosed and expected sequence, reinforcing the transparency the company has adopted in relation to the process as a whole.
Background and Restructuring Goals
In recent years, Azul has faced the profound effects of the COVID-19 pandemic combined with significant macroeconomic and industry pressures, which led to a substantial increase in its indebtedness. Amid economic and political instability in Brazil, the Company implemented several restructuring and capital-raising measures between 2020 and 2025, culminating in the filing for Chapter 11 in May 2025. Chapter 11 is a court-supervised financial restructuring process that allows the Company to reorganize its liabilities while continuing its operations. Azul has been leveraging this well-established legal framework to pursue its goal of eliminating more than US$ 2.0 billion in financial debt, renegotiating lease agreements, and optimizing its fleet, with the aim of emerging from Chapter 11 with greater flexibility and operational and financial sustainability.
Key Milestones and Steps of the Chapter 11
The Company presents below a non-exhaustive summary of the key milestones and steps of the Chapter 11 process already disclosed:
- On May 28, 2025, Azul reported its Chapter 11 filing and the entry into Restructuring Support Agreements (“RSAs”) with its key stakeholders, including holders of the Company’s debt securities, its largest lessor, AerCap, and strategic investors United Airlines and American Airlines (“Strategic Investors”) to support the Chapter 11 process. Together, the RSAs provide for, among other things, approximately US$ 1.6 billion in DIP financing (Debtor in Possession – “DIP”) during the proceedings, the elimination of more than US$ 2.0 billion in debt, and up to US$ 950 million in new capital contributions upon emergence.
- On August 1, 2025, Azul announced the execution of the Backstop Commitment Agreement (“BCA”) with certain stakeholders. The BCA provides for a US$ 650 million investment in a future equity offering of the Company.
- On September 17, 2025, Azul reported that it had filed with the Court a reorganization plan (the “Plan”) in the context of the Chapter 11, consistent with the RSAs. The Company also filed a disclosure statement (the “Disclosure Statement”) with the Court summarizing the Plan, including information about the treatment of various classes of Azul’s creditors under the Plan, as well as other information related to Azul and the Plan. The Plan and the Disclosure Statement were made available through the channels previously disclosed by the Company to the market and contain, among other information, details regarding the treatment to be afforded to the Company’s creditors, equity holders, and other stakeholders as well as information on the capitalization of first level and second level claims and the resulting significant dilution expected for the Company’s current shareholder base.
- On November 1, 2025, Azul announced an agreement with the Official Committee of Unsecured Creditors (“Committee” or “UCC”), securing the Committee’s support for the Plan. Among other terms, the agreement provides that unsecured creditors may choose to receive either (a) a pro rata share of up to US$20 million in cash or (b) an interest in a trust (“GUC Trust”), to which the Company has committed to contribute subscription warrants that may represent up to 5.5% of the Company’s shares on a fully diluted basis (though subject to dilution by the management incentive program) with a strike price equivalent to a market capitalization of US$3.8 billion (“GUC Subscription Warrants”), in addition to annual payments contingent on financial performance targets in 2027, 2028, and 2029, and amounts allocated to certain administrative expenses, all as set forth in the Plan
- On November 25, 2025, the Court approved, pending execution by the parties, the equity investment agreements (“EIAs”) entered into by Azul with the Strategic Investors, or their affiliated entities. Under the terms of the respective EIAs, the Strategic Investors individually committed to make equity investments that will support the Company’s capitalization upon its emergence from Chapter 11 and are incorporated into the Plan. Each investor separately agreed to contribute US$100 million, totaling US$200 million in new funds. The consummation of the investments contemplated under the EIAs is subject to the satisfaction of certain customary conditions precedent for this type of transaction, including, but not limited to: (i) completion of Azul’s restructuring plan; and (ii) obtaining applicable regulatory approvals.
- On November 25, 2025, the Company called an Extraordinary General Meeting to be held on December 16, 2025, in order to deliberate on the following matters on the agenda: (1) the amendment of the rules related to the Company’s authorized capital limit, as currently set forth in its Bylaws, which will become effective upon confirmation of the Plan, to occur through the issuance of a confirmation order by the Court pursuant to Section 1129 of the United States Bankruptcy Code (“Plan Confirmation”); and (2) as a result of the resolution under item (1) above, the amendment of Article 6 of the Company’s Bylaws to formalize the new authorized capital rules, which will also become effective upon Plan Confirmation…
