Brazilian aircraft manufacturer Embraer has reportedly obtained a $600m loan in new liquidity as Covid-19 continues to disrupt the global aviation industry.
With partial backing from the Brazilian Government, the loan will be provided by state bank BNDES and private banks on a 50:50 basis, Reuters reported citing Embraer. The company was engaged in negotiations since late April.
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The announcement follows after Embraer terminated the $4.2bn master transaction agreement (MTA) with aerospace and defence company Boeing in April.
If completed, the agreement would have seen Boeing taking control of Embraer’s commercial planes unit.
According to BNDES executive for aerospace and defence deals Marcos Rossi, the planemaker will be prohibited from employee layoffs for the next two months after obtaining the loan.
Rossi was quoted by Reuters as saying: “People associate Embraer with commercial aviation, but it also has other sources of revenue like executive jets and defence. That’s a good competitive factor.”
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By GlobalDataIn a separate development, Embraer’s commercial aviation unit head John Slattery has departed the company to join GE Aviation.
The company has promoted its commercial unit chief commercial officer Arjan Meijer as the new president and CEO of Embraer Commercial Aviation with immediate effect.
Earlier this month, Embraer CEO Francisco Gomes Neto indicated that the company was exploring new partners.
During the first quarter of 2020, the company reported $633.8m in revenues, representing a year-over-year decline of 23.0% compared with last year.
It delivered five commercial and nine executive aircraft in the quarter.
