Business Context and Reporting Period
This Form 6-K filing by Embraer S.A. covers the month of March 2020, specifically reporting on events occurring on March 17, 2020. The filing serves as a notice to the market regarding a consent solicitation process completed by Yaborá Indústria Aeronáutica S.A. ("Yaborá"), a controlled company of Embraer.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on corporate governance actions related to debt instruments and a strategic transaction.
Material Changes and Corporate Actions
- Consent Solicitation Success: Yaborá successfully obtained consent from holders of specific notes to amend provisions in their governing indentures.
- Affected Debt Instruments: The amendments apply to the following notes:
- 5.150% Notes due 2022 (Issuer: Yaborá)
- 5.696% Notes due 2023 (Issuer: Embraer Overseas Limited)
- 5.050% Notes due 2025 (Issuer: Embraer Netherlands Finance B.V.)
- 5.400% Notes due 2027 (Issuer: Embraer Netherlands Finance B.V.)
- Strategic Partnership with Boeing: The amendments are connected to a strategic partnership between Embraer and The Boeing Company. On January 1, 2020, Embraer transferred assets, liabilities, rights, and obligations related to its commercial aircraft and services operations to Yaborá.
- Ownership Structure: Upon consummation of the transaction, Embraer will hold 20% and Boeing will hold 80% of Yaborá's share capital.
Outlook, Risks, and Contingencies
The transaction transferring commercial aircraft operations to Yaborá remains subject to specific closing conditions:
- Approval by the European Union competition authority.
- Satisfaction of certain customary closing conditions.
The Supplemental Indentures implementing the amendments will become operative only upon satisfaction of the conditions precedent provided in the Consent Solicitation Process. The filing explicitly states that the consent solicitation process will not occur in Brazil and the notes are not registered with the Brazilian Securities and Exchange Commission (CVM).
Investor Verification Checklist
- Verify the status of the European Union competition authority approval for the Embraer-Boeing transaction.
- Confirm the specific terms of the amendments to the indentures for the 2022, 2023, 2025, and 2027 notes.
- Monitor the satisfaction of customary closing conditions required to finalize the transfer of commercial aircraft operations to Yaborá.
- Review the press release dated March 10, 2020, referenced in the filing for detailed context on the consent solicitation.