Brazil airline Azul plans IPO in Sao Paulo and New York

By Reuters

Dec 01, 2014 10:33 PM EST

Azul SA, Brazil's third-biggest airline, revived plans for an initial public offering in Sao Paulo and New York as it prepared to add the first of 75 Airbus jets and to begin flights to the United States.

Azul plans to list preferred shares on the Level 2 chapter of the Sao Paulo Stock Exchange, and American depositary shares on the New York Stock Exchange, according to a filing with the U.S. Securities and Exchange Commission on Monday.

The preliminary prospectus did not give clear guidance on the size or timing of the offering. 

IFR, a Thomson Reuters capital markets publication, reported earlier this year that Azul had revived plans for an IPO worth around $1 billion.

The airline's IPO will be a return to the market for David Neeleman, who founded JetBlue Airways Corp (JBLU.O) and left that airline in 2008 to launch the Brazilian carrier, his fourth airline startup.

Since then, he has grown Azul from a niche regional carrier to a credible challenger to Brazil's dominant duo, Gol Linhas Aereas SA (GOLL4.SA) and the TAM division of Chile's Latam Airlines Group SA LAN.SN.

Neeleman, Azul's chairman and chief executive officer, owns 67 percent of voting shares and 4.58 percent of outstanding preferred shares. He and other shareholders may also sell an unspecified portion of their stakes in the airline as part of the offering.

Press representatives for Azul declined to comment on the IPO.

The announcement comes on the heels of an order for 35 A320neo narrow-body aircraft from Europe's Airbus (AIR.PA) and a leasing agreement for 28 more jets of the same model.

In April, Azul announced plans to start flights to southern Florida early next year, followed by flights to New York, using a dozen leased wide-body jets, first A330-200 and then A350-900 aircraft.

The new fleet plans came as a blow to Brazilian planemaker Embraer SA (EMBR3.SA). Azul is the sole domestic operator of Embraer regional jets, seating up to 130 passengers, but a stalled regional aviation plan in Brazil's Congress left the airline without incentives to add more Embraer jets.

Embraer shares fell 5 percent in Sao Paulo trading, and were on track for their worst one-day drop in a year.

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