Azul S.A AZUL Shares traded higher on Monday after the company announced a deal to reduce the immediate cash it has to spend for rented property.

What happened: Azul said it has successfully secured commercial deals that account for more than 90% of its lease commitments. The Brazilian airline has reached agreements with its lessors to reduce lease payments and eliminate Covid-related deferrals.

The agreements are part of a comprehensive plan aimed at strengthening the company’s cash generation and improving its capital structure. In exchange for the reduced lease payments, lessors will receive a negotiable note due 2030 with an equity price reflecting Azul’s new cash generation, improved capital structure and reduced credit risk.

“Lessors make up 80% of our nominal gross debt. Achieving these agreements shows tremendous success in our approach…Negotiations with lessors and other stakeholders such as OEMs continue and we are very optimistic of achieving all agreements,” he said Alex MalfitaniCFO of Azul.

azul mainly operates passenger and cargo flights to more than 100 destinations in Brazil. The company generates revenue primarily from its aircraft, as well as other sources such as cargo operations, interest on installment sales, baggage prices, excess baggage, and ticket cancellation penalties.

See also: Why is Vistra stock trading higher today?

AZUL Price Promotion: Azul has a 52-week high of $16.89 and a 52-week low of $3.82.

Azul shares are up 40.9% at $5.86 at the time of writing Gasoline Pro.

Photo: Gerard from Pixabay.