阿苏尔航空公司（AZUL4 BZ）：持有：内部努力未能避免申请破产保护

Azul SA(AZUL4 BZ) Hold:Internalefforts did not help to avoid Chapter11 Brazil ◆Azulisthelatestof the threemajor Brazilian airlinesto file forChapter 11;potential emergenceaimedforFebruary2026 MAINTAIN HOLD TARGET PRICE(BRL)PREVIOUS TARGET(BRL)1.003.50SHARE PRICE(BRL)UPSIDE/DOWNSIDE0.90+11.1%(as of30 May 2025) ◆Restructuring efforts todate may render the processsmoothandspeedybutthe cost to equityshareholdersis uncertain ◆Cut TP to BRL1.00(from BRL3.50)onhigher DCF WACC;retain Hold;ADRs delisted, local shares continue trading Chapter11–Azul becomes the third majorBrazilian airline.On 28 May,AzulenteredaChapter 11restructuring agreement with key stakeholders, lessors, andstrategic partners tostreamline its debt andliquidity position.Management’sseveralrounds ofdebt restructuring effortssince last yearbecame ineffectivein recent weeksafterfailingtoobtain incremental equity capital and unlock furtherequitizationof itsdebt notes (only 35% wasequitized). Under Chapter 11, the company willnowhaveaccess to new financing of USD1.6bn. Azulended 1Q25with total debt, includingleases, ofUSD6.3bn (of which USD0.85bnisshort-term)and cashat handofUSD0.3bn. Accordingly, leverage (net debt/LTM EBITDA) was 5.7x (5.2x co-defined)and FCF (after capex before financing)wasnegativecUSD100m. Emergence onfast-track?According to the company’snewplan, the potentialemergence date isexpected to be inFebruary2026, suggesting a notably faster process(c9 months)comparedwithLATAM’s28 months under Chapter 11 (exit in November2022)andGOL’s17 months(awaitinganexit in June2025).AshorterChapter 11recovery,postCOVID-19 effects,make sensein our viewgiven Azul’s healthyoperational metricswithhighyieldsand load factors,along with healthytravel demand inBrazil.In addition, astronger BRL/USD since the beginning of 2025 (byc9%) and loweroil andjet fuel prices should supportoperatingmargins. Overall, weexpecttheemergence with a similar outcome as other peers inBrazil(LATAM and GOL)in theform of optimisedliquidity and capital structure,butat the expense of existing equityshareholders, who will face further dilution upon emergence.Futuredilutionis uncertainat the moment given that 65% of the notes due in 2029-30 (USD804m) were lockedfrom the equitization process,according to the original restructuring plan. However, weseea substantial dilutionriskdue to pending conversion of the notes,in addition to theUSD950mequitization agreement from the Chapter 11 agreement. Cenk Orcan*Aviation & Industrials AnalystHSBC YatirimMenkul Degerler A.S.cenkorcan@hsbc.com.tr+90 212 376 46 14 Jorge Hernandez*Analyst, Aviation and IndustrialsHSBC Mexico, S.A., Institucion de Banca Multiple, GrupoFinanciero HSBCjorge.hernandezhe@hsbc.com.mx+52 55 4760 3113 Cut TP to BRL1.00(from BRL3.50); retain Hold:We cut our TP to BRL1.00drivenby a higher DCF WACC (19.6%,from 17.6%),which incorporates a new Chapter 11risk premium of 10%.We align our estimates withtherevised management planunder Chapter 11 (2025e EBITDA/EBIT cut by 3%/5%).Our target price impliesc11% upside. We maintainaHold rating given thecriticality of successful executionof theChapter 11processand potential dilution effects. * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/ qualified pursuant to FINRA regulations GCC Exchanges Conference 2025 16 -19 June, The May Fair Hotel, LondonRegister Issuer of report:HSBCYatirim Menkul Degerler AS Disclosures & DisclaimerThis report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. View HSBC Global Research at:https://www.research.hsbc.com Financials & valuation:Azul SA Final step to financial restructuring On28May, Azul announced that it was initiating pre-arrangement ofarestructuring processunder Chapter 11with its key stakeholders, including its existing bondholders,largestlessorAerCap, and strategic partners United Airlines(UAL, CMP USD78.57,Buy)and AmericanAirlines(AAL, CMP USD11.40,Buy)aimed to transform the company’s capital structure throughsignificant deleveraging and positive cash flow generation.The agreements include USD1.6bnfinancing as adebtor-in-possession (DiP),which will be used to repaypart of theexisting debt(BRL35.9bn, including leases, as of March 2025),while maintaining USD670m to strengthen itsliquidity (BRL1.6bnas of March 2025) during the restructuring process. Furthermore, theagreement includes a potential equitization of USD950mupon emergence,comprisingan equityoffering of USD650m to repay the remainder of the DiP and a capital investment of USD300mfrom United Airlines and American Airlines, subject to the satisfaction of certain conditions. WhyChapter 11now? We provide a recap ofthe latest developments(see table below).On23April,the companyannounced a capital increase of BRL1.6bn,which fell short of expectations as the number ofshares increased by 3%, vs 55% on the high-end of the offering.On30April,additio