This story is part of AIN's continuing coverage of the impact of the coronavirus on aviation.
Embraer has finalized the terms of contracts providing for up to $600 million in working capital and export financing, the company revealed late Monday in a notice to securities markets. The Brazilian National Bank of Economic and Social Development (BNDES) has committed to providing half of the financing, up to a value of $300 million, while the balance comes from private and public banks under the condition that the financing plan maintains a 50/50 split between BNDES and the other banks.
Embraer said the lines of credit will further reinforce the cash position of the company, guaranteeing funds from the production phase through the moment of product shipment for the export market.
An Embraer spokesman told AIN Tuesday that the agreement with BNDES carries certain conditions related to employment at the company, including a commitment not to lay off any employees for a period of two months. He added that the financing deals do not include any provisions calling for Embraer to forfeit an equity position in the company.
“This type of operation is exclusively debt and does not alter the shareholding structure of Embraer,” Embraer said in its statement. “The company will continue to evaluate additional forms of financing in order to maintain a long-term indebtedness profile conducive to its business cycle.”
The new financing comes as Embraer accelerates a reorganization process that led to the exit of Embraer Commercial Aircraft CEO John Slattery, who accepted the chief executive position at GE Aviation effective September 1. Embraer has replaced Slattery with its commercial aviation division’s chief commercial officer, Arjan Meijer. Citing unnamed sources, Reuters reported Tuesday that four other notable senior Embraer executives will leave the company as well, including chief operations officer Nelson Salgado.