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Brazil,United States : BRAZIL: AZUL withdrew its $100m IPO Plans in the USA

July 10, 2014

The leading Brazilian airline Azul on Monday has dumped its strategy for an initial public offering.

The airline, controlled by JetBlue founder David Neeleman, had originally filed for an IPO worth $100 million in May last year.

However, it was assumed that the company would net at least $500 million.

The airline's IPO withdrawal has not been fully surprising.

Previously media reported that Azul would try to launch the IPO prior to the Football World Cup.

Responding to these reports, in February the airline founder and CEO Neeleman revealed, "I don't need to do an IPO because of the World Cup, in fact we don't need to do an IPO."

After that the company purchased eleven new jets from Airbus in April, and CEO Neeleman again stated that he did not consider any urgency in launching the IPO.

Both JetBlue and Azul have been established by the airline industry stalwart Neeleman. Moreover, he was one of the founders of Morris Air that Southwest Airlines bought in 1993.

Neeleman has accomplished the listing of JetBlue in 2002.

Azul has been successful to expand its local market share to 17% in May 2014 from 13% in May last year, while the performances of the industry giants TAM (40%) and GOL (35%) in terms of percent of miles or air travel purchased remained same. The Sao Paulo-based Azul will pierce into the international air travel market after its receipt of five of its new Airbus aircraft in 2017. At present, the international air travel segment is ruled by TAM, with a share of 87%, followed by GOL (13%).

Set up in 2008, Brazil's third-largest airline had previously decided to list ADSs on the NYSE and preferred shares on the SÃo Paulo Stock Exchange. It had appointed Morgan Stanley, Itau BBA, Goldman Sachs, Santander and Banco do Brasil as the joint bookrunners for the arrangement.

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Source: TendersInfo (India)

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