EM Investor : Aircraft Maker Switching Pilots


Embraer, the worlds leading manufacturer of commercial jets with up to 110 seats, is one of Brazils leading exporters, with an order backlog as of June 30 totaling $10.2 billion. The company, based in So Jos dos Campos, has just gone through a wholesale reorganization of its capital structure. As of June 5 its common shares began trading on the Novo Mercado segment of Bovespa, and its American depositary receipts started trading on the New York Stock Exchange. Embraers former preferred shares ceased trading.

CEO Maurcio Botelho notes that Embraer has grown by tenfold in the past decade under his watch. The restructuring will enhance Embraers ability to finance expansion programs in the capital markets, the company said in a release. Botelho, an engineer who worked on Brazils first nuclear power plant before joining Embraer, will leave his CEO post next April and remain as chairman. He will be succeeded as chief executive by his second in command, Frederico Fleury Curado. The company delivered 36 aircraft in the second quarter, compared to 30 in the same period a year earlier. Its earnings rose to a record $139 million in the quarter ended June 30 on sales of more than $1 billion, despite pressure on margins from the appreciation of the real.

Gordon Platt