Hainan Airlines will sell its remaining interest in Azul, as its parent HNA Group continues to divest some of the myriad of global investments it made in recent years.
The Chinese carrier will sell its 19.4 million American depositary shares (ADRs) listed on the New York Stock Exchange, a prospectus filed on 27 June shows. The shares are equal to a 17.8% stake of Azul's preferred shares or a 17.2% economic interest in the airline.
Hainan's stake is worth $335 million based on the $17.31 per ADR close price on 26 June.
The move will not impact Azul and Hainan's commercial relationship, the former says.
However, while Azul and Hainan outlined plans for a codeshare and other commercial initiatives when the latter first bought the stake in 2016, they have yet to form a codeshare, FlightGlobal schedules data shows. The most prominent aspect of cooperation to date was Azul's transfer of its five Airbus A350-900 leases with AerCap to HNA last year.
The sale comes as HNA works to raise capital following years of debt-fuelled global acquisitions. Recent moves include a planned CNY7.03 billion ($1.09 billion) capital raising on the Shanghai Stock Exchange earlier in June, and the sale of 4% of Hainan's stake in Azul to United Airlines for $138 million in April.
Hainan paid $450 million for a 23.7% stake in the Brazilian carrier in 2016.
Based on Azul's ADR share price on 26 June, Hainan stands to make a roughly 5% return on its original investment.
Citi, Deutsche Bank and UBS Securities are joint global coordinators, and Itau BBA and Banco Bradesco are joint bookrunners of the ADR sale.
Source: Cirium Dashboard