Azul Linhas Aéreas Brasileiras (AD, São Paulo Viracopos) has launched a primary share offering to raise up to BRL7.4 billion reais (USD1.3 billion), which will be used to settle financial debts as part of the company’s ongoing Chapter 11 bankruptcy restructuring.

In a notice to the markets, the Brazilian carrier said it would offer around 724 billion preferential shares and an equal number of ordinary shares.

Existing shareholders will have priority rights to subscribe to the new offering on a pro rata basis. Azul is offering the preferential shares in allotments of 10,000, with each allotment priced at BRL101.45 (USD18.30), while the ordinary shares are being sold in groups of one million for BRL135.27 (USD24.40) per group, Reuters reported.

Earlier in December, the US bankruptcy court approved Azul’s debt restructuring, which will allow the airline to slash over USD2 billion in debt and raise capital through a new equity rights offering and investments from American Airlines and United Airlines.