The increase comes less than a month after the airline signed a non-binding memorandum of understanding with Grupo Abra for a possible merger.

The board of directors of Brazilian airline Azul has approved the company's capital increase for a maximum amount of 6.132 billion Brazilian reals (US$ 1.057 billion), in accordance with binding contracts between the company and certain lessors and equipment suppliers (OEMs).

This increase will be achieved through a subscription of more than 191 million new shares, which will have an individual issue price of 32.09 Brazilian reals (US$ 5.7).

The minimum subscription for the increase will be 1.51 billion Brazilian reals (US$ 260.2 million) and is part of the company's financial restructuring process.

This price was set without undue dilution for the company's current shareholders, based on negotiations between lessors and the airline. The right of first refusal will be guaranteed to shareholders who already own shares issued by the company.

The increase comes less than a month after the airline signed a non-binding memorandum of understanding with Grupo Abra, the holding company comprising the airlines Gol (from Brazil) and Avianca (from Colombia), aligning the terms and conditions for the potential business combination between Azul and Gol, according to the structure to be defined between the parties.