TAP initiated legal action in the Lisbon Civil Court against Azul Linhas Aéreas Brasileiras and Bondholders, a company based in Valencia, Spain, in response to a conflict over a €90 million bond loan claimed by the Brazilian company.
This conflict, dating back to 2016, revolves around a request from Azul for TAP to repay the loan ahead of schedule, originally set for 2026, according to reports from the Expresso newspaper and published by Aeroin.
Early repayment
The loan was granted by Azul to TAP when David Neeleman was the main shareholder of the Portuguese company. Facing financial difficulties, Azul requested in September of this year that TAP repay the loan ahead of schedule, which over time could amount to nearly €200 million. TAP denied the request, adhering to the original terms of the contract.
The Finance Minister had previously indicated that the disagreement over the loan might ultimately be resolved in court. The situation escalated when Azul threatened to break the commercial partnership the two companies maintain in Brazil and turned to the contract’s trustee to seek a resolution to the conflict.
To court
In a counterattack strategy, TAP decided to take the matter to court, aiming to protect its interests and maintain the agreement until the originally scheduled maturity date. The decision to initiate legal proceedings reflects TAP‘s determination to defend its contractual position against the financial difficulties faced by Azul.
This lawsuit highlights the complexity of commercial relationships in the aviation sector, particularly when they involve international partnerships and significant financial stakes. The next steps will depend on judicial decisions that could shape the outcome of this financial impasse between the two airlines.
