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

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. 

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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