Brazil IPO Market Shows Signs of Life as Azul Announces Offering

  • Azul is fourth company in 2017 to announce initial share sale
  • Unidas, Hermes Pardini plan to price shares on Friday

Azul SA, the airline led by JetBlue Airways Corp. founder David Neeleman, filed for an initial public offering in the U.S. after at least two previous delays, adding to a pickup in share sales by Brazilian companies.

The Sao Paulo-based airline, in a statement to the U.S. Securities and Exchange Commission on Monday, filed for a $100 million IPO, a placeholder amount used to calculate fees that may change. Azul joins car-rental firms Movida Participacoes SA and Unidas SA, and health-care company Instituto Hermes Pardini SA in breathing life into Brazil’s left-for-dead IPO market. Movida priced its offering on Monday, while the two other companies are expected to price on Friday. Since June 2015, Brazil had just one other IPO.

Brazilians are anticipating an economic recovery in 2017 after the country’s deepest recession on record, the impeachment of President Dilma Rousseff and a corruption scandal that’s lasted almost three years. Brazilian stocks have doubled in the past year in dollar terms amid optimism that President Michel Temer can restore confidence in the region’s biggest economy.

Only one company listed its shares in Brazil in 2016. Medical diagnostics provider Alliar Medicos a Frente SA went public in October, the first IPO in 16 months. Almost a year ago, Neeleman said an IPO was off the agenda, in light of the economic climate in its home market. Azul was founded in 2008 by Neeleman, who is the company’s controlling shareholder as well as chairman and chief executive officer.

Azul, Brazil’s third-biggest airline by passengers, said in June it was studying another reduction to its fleet as air-travel demand shrank to the lowest in five years. The country’s aviation industry contracted 5.5 percent last year, according to Abear, the Brazilian airline association.

The airline plans to list American depositary shares on the New York Stock Exchange and preferred shares in Brazil. Proceeds from the offering will be used to repay debt and for general corporate purposes, according to Monday’s filing. In 2013, Azul canceled a plan to list preferred shares on the BM&FBovespa.

Citigroup Inc., Deutsche Bank SA and Itau BBA are managing the U.S. IPO, the prospectus shows.

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