* Azul to monitor markets to reconsider IPO in the future
* Azul was expected to raise 1 billion reais in IPO
By Juliana Schincariol
RIO DE JANEIRO, Aug 19 Azul Linhas Aéreas
Brasileiras SA, Brazil's third-biggest airline, on Monday said
it gave up plans for an initial public offering due to adverse
The company said in a statement, however, that it still
intends to launch an IPO in the future and that it will keep
monitoring markets to find the best moment to do so.
Sources had told Reuters in June that Azul was considering
postponing its IPO as investors became more averse to taking
risk in Brazilian markets.
The total size of the transaction had been expected to reach
about 1 billion reais ($414 million), according to sources.
Azul had announced the IPO in May, under which it would have
sold stock in a primary offering to raise funds for corporate
purposes, with shareholders partially exiting their stake in the
company through a so-called secondary offering.
Stock market newcomers in Brazil face a difficult
environment as investors grow increasingly disappointed with the
country's high inflation rates and faltering economic growth.
The benchmark Bovespa stock index has shed 15
percent so far this year, while the currency is also down about
Azul said in a recent securities filing that funds from the
IPO would be used to purchase new planes, add routes and
reinforce working capital. Part of the proceeds would be used to
pay off some loans and make lease payments on five aircraft.
Azul, founded by Brazilian-born entrepreneur David Neeleman,
competes against LATAM Airlines Group and Gol Linhas
Aereas Inteligentes SA by offering low fares and
direct routes between under-served cities. It is the fourth
low-cost airline launched by Neeleman, who is best known for
founding U.S. carrier JetBlue Airways Corp.
Among Azul partners are Gávea Investimentos, the Rio de
Janeiro-based asset management company controlled by JPMorgan
Chase & Co. and U.S. private equity firm TPG.
The company had hired the investment banking units of Banco
Santander Brasil, Banco do Brasil SA,
Itaú Unibanco Holding SA and Morgan Stanley & Co
to handle the deal.