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Brazil’s Embraer Could Receive $1.5B Loan After Failed Boeing Deal

By  |  May 3, 2020

Brazilian planemaker Embraer may obtain credit lines between US$1 billion and US$1.5 billion from the country’s development bank, BNDES, and other lenders after a deal to sell its commercial aircraft division to Boeing fell through, two sources close to the matter said on Friday, May 1. 

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    Proceeds from the loan would be used as working capital and export finance, the sources said, asking for anonymity because the negotiations remain private. Embraer may also be included in a relief program for national airlines affected by the COVID-19 pandemic, reported Reuters. 

    Last week, Boeing announced the cancellation of a 2017 agreement to buy control of Embraer’s commercial jets division for US$4.2 billion, raising doubts about the Brazilian company’s future and motivating it to commence arbitration proceedings against the US company. 

    “Embraer was not contemplated in our efforts to help the airline industry. … Then there was the issue with Boeing and it became a candidate” for support, one of the sources told Reuters. 

    The source said there is consensus among a bank syndicate including the BNDES that Embraer would be eligible for financial aid, noting talks are in an early stage.

    Full Content: Reuters

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