Azul Rushes to Raise Cash to Seal Lessor Deal and Slash Debt

Azul SA is rushing to raise cash as part of a deal it reached last week with its aircraft lessors, a key step in the Brazilian carrier’s attempt to again rework its debt.

The company was able to strike an agreement with lessors and parts suppliers that reduces its debt by 3 billion reais ($540 million) in exchange for 100 million new preferred shares. The announcement sent shares rallying as much as 22%.

An Azul Airlines passenger aircraft at Carajas Airport in Para state, Brazil.

Photographer: Dado Galdieri/Bloomberg

But the boost proved short-lived. The stock eked out gains of less than 1% for the week, and remains down more than 60% this year, the ...