Eve Holding , Inc. (NYSE:EVEX), an aircraft manufacturing company, has entered into a financing agreement with Brazil's National Development Bank (BNDES) for four credit lines totaling R$500 million (approximately $89.6 million). The funds will be used to establish a manufacturing unit for electric vertical takeoff and landing (eVTOL) aircraft in Taubaté, São Paulo.
The agreement, signed by Eve Holding's subsidiary, EVE Soluções de Mobilidade Aérea Urbana, Ltda. (Eve Brazil), and Embraer S.A. outlines the credit lines to be utilized within 42 months from the October 10, 2024, agreement date. The financing includes Sub-credit A for R$140 million, Sub-credit B for R$60 million, Sub-credit C for R$210 million, and Sub-credit D for R$90 million, with varying interest rates and conditions.
Sub-credit A carries a 2.20% annual interest rate, while Sub-credit C has a 2.75% rate, both above the Reference Rate (TR) 226. Sub-credits B and D have annual interest rates of 1.10% and 1.65%, respectively, plus a fixed rate published by the BNDES System. The debt from Sub-credits B and D will be adjusted according to the US dollar exchange rate fluctuation index (PTAX).
Repayment of the principal from each credit line is scheduled to begin in 2028, with 25 semiannual installments. BNDES retains the right to terminate the agreement and accelerate payments under certain conditions.
This strategic move by Eve Holding, previously known as Zanite Acquisition Corp., aligns with its growth plans in the emerging eVTOL market.
The financing agreement is detailed in an 8-K filing with the SEC and is based on a press release statement.
In other recent news, Eve Holding Inc (NYSE:EVEX). has been the focus of attention from several analyst firms. H.C. Wainwright initiated the company with a Buy rating, highlighting its strategic positioning in the urban air mobility (UAM) value chain. The firm also noted the company's plans to start selling its aircraft in 2026, with revenue generation from services and operations solutions expected as early as 2025.
Canaccord Genuity, on the other hand, adjusted its price target for Eve Holding to $7.00, down from $8.50, while maintaining a Buy rating. The firm acknowledged Eve Holding's significant backlog of 2,900 units, the largest in the sector.
Contrastingly, Cantor Fitzgerald upgraded Eve Holding from Neutral to Overweight, despite a price target adjustment to $5.00 from the previous $7.00. This upgrade followed the unveiling of the company's full-scale electric Vertical Take-Off and Landing (eVTOL) prototype and the announcement of plans for the assembly of up to five additional eVTOL prototypes in 2025.
Eve Holding's recent financial developments include securing $94 million in new equity financing, despite a reported net loss of $25 million in the first quarter. The company ended with $223 million in cash and secured contracts for maintenance, repair, and overhaul services, potentially generating up to $935 million in revenue over the next five to ten years.
These are recent developments that investors should note.
InvestingPro Insights
Eve Holding's recent financing agreement with BNDES for R$500 million to establish an eVTOL manufacturing unit in Brazil marks a significant step in the company's growth strategy. However, investors should consider some key financial metrics and insights from InvestingPro when evaluating EVEX's prospects.
According to InvestingPro data, Eve Holding currently has a market capitalization of $946.61 million. Despite the company's ambitious plans, InvestingPro Tips indicate that EVEX is not profitable over the last twelve months and analysts do not anticipate the company will be profitable this year. This aligns with the company's reported adjusted operating income of -$148.2 million for the last twelve months as of Q2 2024.
On a positive note, an InvestingPro Tip highlights that Eve Holding holds more cash than debt on its balance sheet, which could provide some financial flexibility as it pursues its manufacturing expansion. However, investors should be aware that the stock has experienced significant price declines, with a one-year price total return of -60.08% as of the latest data.
For those interested in a deeper analysis, InvestingPro offers 11 additional tips for EVEX, providing a more comprehensive view of the company's financial health and market position.
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