NEW YORK, Jan 10, 2026, 09:40 EST — Market closed.
- Azul’s board updated the terms and process for converting mandatory debentures into preferred shares as part of its Chapter 11 plan.
- This week, a U.S. filing clarified that the Brazil share offering linked to the plan won’t be extended to ADR holders.
- Next up: executing the offering and conversion phases. Azul’s corporate calendar sets Feb. 26 for its annual statements and Q4 disclosures.
Azul S.A.’s U.S.-traded sponsored preferred ADRs grabbed attention again after the Brazilian airline’s board greenlit changes to the mandatory conversion terms for debentures into preferred shares, according to meeting minutes released Friday.
This change hits dilution head-on — determining who receives stock, the timing, and the conversion ratio. A debenture represents debt, while a “mandatory conversion” means that debt is forcibly turned into equity, usually increasing the total shares outstanding.
The updated clause tightens the schedule. It now connects the conversion to a court “confirmation order” tied to Azul’s Chapter 11 reorganization plan in the U.S., and ties the process to the close of an exercise window for subscription warrants — rights allowing holders to purchase shares at a fixed price.
The minutes revealed Azul will “forgive and definitively extinguish” interest linked to the debentures, including accrued interest up to the conversion date. Once the conversion wraps up, the debentures will be cancelled.
The board signed off on converting 908,401 debentures into 1,361,168,043,222 preferred shares, set at 1,498,422 preferred shares per debenture, the minutes revealed. The document also noted the ratio might shift if the company greenlights a wider conversion of preferred shares into common shares at a rate of 75 common shares per preferred share.
Azul informed the U.S. Securities and Exchange Commission earlier this week that it approved a Brazilian primary offering of 723,861,340,715 new common shares alongside an equal number of preferred shares, totaling 7,441,550,992.27 reais (the dollar amount wasn’t disclosed in the filing). The company said the issuance is tied to its Chapter 11 plan, aimed at converting some debts into equity.
The filing also clarified that the offering excludes holders of the company’s ADRs, who won’t have the right to join the priority subscription phase reserved for existing shareholders in Brazil.
When it comes to ADR investors, the details behind the scenes can be just as crucial as the headlines. According to Citi’s depositary directory, Azul’s ADR program trades OTC under the ticker AZULD, carrying a hefty 50,000:1 ratio of ordinary shares to ADRs.
The ADR’s quoted price mirrors that structure—and recent restructuring moves—just as much as daily market sentiment. Data services listed AZULD at $1,066.67 at its last close on Jan. 2, flat for the session, with no trading recorded.
The path isn’t straightforward. Conversion hinges on the Chapter 11 confirmation order and the timing of the warrant exercise period. Plus, equity issuance and any subsequent ADR issuance could alter the supply dynamics. With thin OTC trading, price swings could be sharp once liquidity picks up.
Investors are also watching Azul’s next key date: Feb. 26, 2026. That’s when the company plans to release full-year financial results, fourth-quarter reports, and host analyst meetings, according to its 2026 corporate events calendar.
