Embraer’s shares skyrocket on announcement of Eve’s deal with SPAC and NYSE listing


SAO PAULO, Dec.21 (Reuters) – Shares of Brazilian aircraft maker Embraer SA (EMBR3.SA) soared on Tuesday after the company announced it had agreed to combine its electric aircraft subsidiary Eve with Zanite SPAC and list it on the New York Stock Exchange.

The transaction values ​​Eve’s equity at $ 2.9 billion and will include the combination with Zanite Acquisition Corp and additional investment from a group of investors including Embraer, Zanite, financial investors and strategic partners such as Azorra Aviation, BAE Systems (BAES.L), Republic Airways, Rolls-Royce (RR.L) and SkyWest Inc (SKYW.O).

After the transactions, Eve, listed on the NYSE under the ticker EVEX, will have $ 512 million in cash that will be used to develop her flying taxi. The company is expected to start trading in the second quarter of 2022, after the deal with Zanite is closed.

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Eve already has an order pipeline of over $ 5 billion. Customers who have made pre-orders include rental companies, helicopter operators and ridesharing companies.

After announcing Eve’s listing, Embraer also announced new orders. Florida-based Azorra, one of Eve’s investors, has ordered 200 electric vertical take-off and landing (eVTOL) aircraft from Eve. Republic Airways, also an investor, has placed an order for up to 200 evTOLs, with the aim of implementing an eVTOL network in the east and central US markets.

Skywest, which is part of the same investor group, has ordered 100 electric aircraft with the aim of developing a regional chain in the United States, while BAE Systems will work with Eve to explore the development of its eVTOLs for the defense market. .

Embraer’s shares traded in Brazil jumped 16% at the opening in Sao Paulo, to 23.08 reais.

Embraer will own more than 80% of Eve after the SPAC merger and the group’s additional investment. Eve’s cash flow is expected to be sufficient to fund the development of the flying taxi through its certification, expected in 2025, Embraer’s CEO Francisco Gomes Neto told Reuters.

Gomes Neto said in an interview that Eve will likely have multiple production sites to deliver to customers on different continents, but the locations have yet to be decided. Gomes Neto expects Eve to reach $ 4.5 billion in revenue by 2030, with around 15% of the global urban air mobility market.

The production phase will likely be funded by debt, said Eve co-CEO Jerry DeMuro, former CEO of BAE Systems. Eve’s other co-CEO is Andre Stein, an Embraer executive for two decades.

Embraer will provide infrastructure to Eve, including the assignment of engineers to projects, testing grounds and simulation equipment.

“This will allow us to reduce costs,” DeMuro said in an interview.

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Editing by Jacqueline Wong and Bernadette Baum

Our Standards: Thomson Reuters Trust Principles.


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