Tuesday, June 16, 2020

Embraer closes financing contract of up to US$ 600 million

Embraer said on Monday (15) that it finalized the terms of financing contracts for working capital for exports in the amount of up to US$ 600 million. The payment term will be up to four years.
Half of the amount will be financed by the National Bank for Economic and Social Development (BNDES). The remaining amount will be financed by private and public banks, at the rate of 50%.
The financing lines "will further strengthen the company's cash position by ensuring resources from the production phase to the time of shipment of products to the foreign market," the company said in a statement, adding that it will continue to evaluate additional forms of financing to maintain a long-term debt profile.
At the beginning of June, Embraer recorded a net loss attributed to shareholders of R$ 1.276 billion in the first quarter, a 694% increase compared to the loss of R$ 160.8 million in the first three months of 2019.
In addition to the crisis context of the airline industry, Embraer had been facing difficulties since the end of the agreement with Boeing. The company said in the balance sheet that the costs of separating the business related to the strategic partnership with Boeing, now closed, recognized in January, were R$ 96.8 million.
Since then, the aircraft manufacturer has been discussing financing proposals with BNDES and private banks in Brazil and abroad.
In late April, Boeing announced the termination of the deal that would give the U.S. giant control over Embraer's commercial aviation division. The $5.26 billion deal provided for the creation of a joint venture that would be under Boeing's command, with an 80 percent stake. Embraer would take the remaining 20%, and could sell its share to the American company.
The value was considered as fundamental for Embraer's financing for the coming years. Boeing states that it "exercised its right to terminate" the agreement "after Embraer failed to meet the necessary conditions."
Embraer, for its part, said at the time that Boeing "improperly" terminated the agreement between the companies in the commercial area and that the U.S. company "fabricated false claims as a pretext to try to avoid its commitments to close the transaction"
G1 - 15/06/2020 News Item translated automatically
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