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Brazilian Airline Azul May Seek IPO for Second Time in One Year

Jan 22, 2014 5:00 am

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Azul abandoned its first IPO in 2013 citing a weakening market. It’s awaiting a regulatory announcement before officially announcing an IPO, but a merger also remains an option.

— Samantha Shankman

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André Gustavo Stumpf  / Flickr

Brazilian airline Azul takes off from Brasilia International Airport. André Gustavo Stumpf / Flickr


Azul Linhas Aereas Brasileiras SA, the Brazilian airline created by JetBlue Airways Corp. founder David Neeleman, may announce as soon as next week an initial public offering of as much as $450 million, according to a person familiar with the plans.

The carrier is likely to sell $350 million in primary shares and may offer an additional $100 million in stock in a secondary sale, said the person, who asked not to be identified because the plans aren’t public. The shares would be sold in late March or early April, the person said.

The share sale would be Brazil’s biggest since October and cap more than five years of operations by Azul as a closely held airline. The Barueri, Brazil-based carrier scrapped a planned offering in August after the benchmark Ibovespa index tumbled 21 percent in the first seven months of 2013.

Azul is awaiting a Jan. 28 decision on its proposed capital structure from securities regulator CVM before making any announcement, the person said. The airline raised $100 million at the end of 2013 in a private deal, allowing it to postpone a share sale again if market conditions worsen, said the person.

Neeleman said today at a Sao Paulo press conference that the airline will study the market after the CVM decision is announced. He declined to comment further on any IPO plans.

Last year’s IPO cancellation by Azul came a week after Votorantim Cimentos SA, Brazil’s biggest cement maker, pulled its $3.7 billion plan, citing a deteriorating market. Companies in Brazil have raised 27.2 billion reais ($11.5 billion) in the past year, down about 4.2 percent from the previous 12-month period, data compiled by Bloomberg show.

While there are few opportunities for airline mergers in Brazil, Azul is prepared to consider options if the possibility arises, Neeleman said in an interview after the press conference. “You never know,” he said.

Editors: Ed Dufner and Molly Schuetz.

To contact the reporter on this story: Christiana Sciaudone in Sao Paulo at csciaudone@bloomberg.net. To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net.

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