Embraer announces 21.6m equity swap, share buyback
Brazilian aerospace manufacturer Embraer announced equity swap with Banco Itaú Unibancoto.
The company said the board approved equity swap with the bank to manage the cost of future payments they must make under their long-term incentive plans based on “phantom shares”.
The agreement is set for a maximum of 12 months (starting Nov 7, 2025).
It covers the value of up to 10,932,998 shares.
At the end of 12 month period, Embraer will receive price changes and any dividends related to its shares and will pay a floating interest rate (CDI) plus a small fee (spread).
The transaction is a cash-settled contract and no actual shares are exchanged.
Buyback announcement
In addition to the equity swap, Embraer also launched share buyback programme.
The company said the programme will help with potentially cancelling some of those to reduce the total number of shares outstanding, fulfil obligations under the employee compensation plans and hold them in treasury (which can be used later).
The scope of repurchases include 10,800,000 common shares (about 1.5% of its outstanding shares).
The program will last for 12 months (until November 6, 2026).
Shares will be bought on the stock exchange at market prices.
The company stated that its financial situation is strong enough for this programme and it will not hurt its ability to meet other financial obligations.
The transaction will be managed by BTG Pactual Serviços Financeiros.
Embraer’s board will determine the timing and the number of shares to be effectively acquired with resources available from its Investment and Working Capital Reserve.
Both announcements are part of Embraer’s strategy to manage the financial risk associated with Embraer’s employee incentive plans, which are tied to the company’s stock price.
Embraer share was trading at $64.4 per share.
As of November 3, Embraer’s tickers on both Brazilian Stock Exchange and New York Stock Exchange were changed to “EMBJ3” and “EMBJ”, respectively. Embraer was formerly trading as “ERJ” on the NYSE.
Embraer is undergoing a ‘highly positive phase’ as it posted all-time high third quarter revenue of $580m for its executive aviation segment but the profitability was dented by biting US tariffs.
