Embraer has agreed to merge its electric aircraft subsidiary, Eve, with US-based SPAC Zanite, with a view to a potential listing on the New York Stock Exchange (NYSE) in 2022.
The deal is valued at $2.9 billion by Eve and will include, in the first step, a merger with blank check company (SPAC) Zanite Acquisition Corp.
Subsequently, Eve will receive additional investment from a group that includes Embraer, Zanite, financial investors and strategic partners such as Azorra Aviation, BAE Systems, Republic Airways, Rolls-Royce and SkyWest Inc.
Pre-market US-listed Embraer shares are up about 14% and in Brazil, shares have opened more than 16%.
Together with the agreement with the xanite, the Embraer has announced up to 500 orders for its electric EVTOL vertical take-off and landing aircraft. Faith orders are theoretically placed by Azorra (up to 200 units), Republic Airways (up to 200 units) and SkyWest (100 units).
In addition, the Brazilian company announced an agreement with the British company BAE Systems to develop Eve aircraft for applications in the “defense and security” markets.
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Following the Embraer and Zanite investments, Eve, which will be listed on the New York Stock Exchange under the symbol EveX, will have a cash position of $512 million, which will be used to develop the electric air taxi.
The company has already received orders worth nearly $5 billion, corresponding to approximately 1,735 aircraft from 17 customers including charter companies, helicopter operators and joint carriers.
a Embraer will remain with approximately 80% stake in Eve after additional investment. Embraer CEO Francisco Gomez Neto said Eve’s money should be enough to cover the development costs of the electric plane until its adoption, expected in 2025.
Gomes Neto hopes that Eve will have several production sites because it will have to deliver them to customers on several continents, but the factory sites have yet to be chosen. The CEO forecasts EV revenue of $4.5 billion in 2030, and a 15% share of the global urban air transport market.
Jerry DeMuro, co-chairman of Eve, and former head of BAE Systems, said the production phase will likely be financed through debt issuance. The other co-CEO of Eve is Andre Stein, who has been the CEO of Embraer for more than two decades.
Embraer will provide infrastructure for Eve, including allocating engineers as needed on projects, test sites and flight simulators. “This will allow us to reduce production costs,” DiMuro said in an interview.
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