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bkmbr
Topic Author
Posts: 262
Joined: Fri Apr 24, 2020 2:27 am

Embraer to get a US$ 600 million relief pack from the Brazilian goverment

Thu May 28, 2020 12:59 am

According to some news source in Brazil, Embraer is about to get a US$ 600 million relief pack from the Brazilian government (through BNDES, the Brazilian Development Bank), and a pool of Brazilian banks (Banco do Brasil, Banco Santander Brasil and Banco Bradesco) with no possibility for creditors to hold equity interest in the company. BNDES and the pool will provide 50% each and the and the payment term would be two to three years.According to one of the articles Embraer stated that it is discussing financing proposals, in particular one aimed at financing working capital for exports.

Here are the source (in Portuguese)
https://www.moneytimes.com.br/embraer-n ... a-dividas/
https://oglobo.globo.com/economia/embra ... 1-24446702
https://economia.uol.com.br/noticias/bl ... fontes.htm
https://www.aeroflap.com.br/embraer-neg ... r-dividas/

Probably this relief pack and the 2.3 billion in cash reserves Embraer had in hand by the end of 2019 (and also the possible Boeing breakup fee to be decided in the arbitration court) will help for now and help the company to survive the Covid crisis, but I doubt it will be enough to sustain a stand-alone Embraer in the long run.
 
Jomar777
Posts: 543
Joined: Tue Oct 20, 2015 8:45 am

Re: Embraer to get a US$ 600 million relief pack from the Brazilian goverment

Thu May 28, 2020 10:59 am

In the long run, you can say that Embraer managed to defeat (survive that is) its main competitor, BBD, only to fall foul of the resulting collateral effect - a polarized world between Boeing and and Airbus.

But I am sure they will be fine because their executive and military divisions are string. The E2 will sell but probably not that much although they will keep on churning out E175s for as much as the US Market want.

I guess it is time for them to review whether to continue with their commercial aircraft division or to come up with a brand new project just as much as Boeing needs something new to replace the B737.
 
bkmbr
Topic Author
Posts: 262
Joined: Fri Apr 24, 2020 2:27 am

Re: Embraer to get a US$ 600 million relief pack from the Brazilian goverment

Thu May 28, 2020 7:58 pm

Embraer's commercial aircraft division is responsible of 50% of the profits of the company, the sales may be slow but according to Embraer's financial report the division has presented consistent profit over the years, so why Embraer would scrap a profitable division for nothing in the first place? The single aisle market is not just 737 and A320, Embraer could be alone against Airbus for now but Embraer is not doomed, not only Boeing can try to renegotiate the agreement with Embraer with different terms but there's even the China route in the worst case scenario. The reports of Embraer's death were greatly exaggerated. The company is fine, not being the #1 but that also does not mean that the company is bankrupt. Embraer have for now the only airplane capable of provided the scope restricted market in the US, the 175E1 has a over 150+ firm order backlog and with Mitsubishi virtually scraping the M100 project Embraer's become the only company capable of producing such a product for the next decade at least.
 
Cedar
Posts: 65
Joined: Mon Dec 25, 2017 1:07 am

Re: Embraer to get a US$ 600 million relief pack from the Brazilian goverment

Thu May 28, 2020 8:18 pm

Embraer will be fine & will emerge a stronger company, including the commercial division - the broken deal with Boeing will only make them push that much harder & show the world that they are a force to be reconed with. You can bet they will be working hard on improving every angle of the organization.

You know when that person tells you, you suck & you will never amount to anything - and it makes you want o just shut them up & prove them wrong.
Well Embraer is the one will be the one who's goal will be to say - "I told you"
My bets are on Embraer - I wouldn't underestimate them, but they may infact want you to so they can quietly sneak up on the competitor.

Watch this space - They will do very well.

Cedar

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