July 31, 2020 / 1:18 AM / in 10 days

UPDATE 1-Embraer announces more buyouts as it gets $97 mln loan guarantee

(Recasts with Embraer buyout program)

WASHINGTON/SAO PAULO, July 30 (Reuters) - Brazil’s Embraer said on Thursday it will implement a new staff buyout program, at the same time as the U.S. Export-Import Bank said it had approved a $97.2 million working capital loan guarantee for planemaker’s U.S.-based business jet subsidiary.

The federal export credit agency said the guarantee for the one-year, revolving working capital facility from Apple Bank for Savings would support an estimated 800 U.S. jobs, mainly at Embraer Executive Aircraft’s factory in Melbourne, Florida.

EXIM said the loan guarantee also would support supply chain jobs in Arizona, Connecticut, Georgia, Tennessee and Texas.

Embraer has been struggling to craft a new future since Boeing Co canceled its $4.2 billion takeover of the Brazilian jetmaker’s commercial aircraft business in April.

The company said its new buyout program, the second since the pandemic began, will target workers who are currently furloughed or employees who are at least 55 years of age.

Workers would get 10% of their salary for each year worked.

Embraer’s larger rivals Boeing Co and Airbus have also announced plans to reduce their workforce in light of the crisis that has hammered air travel demand.

EXIM said the guarantee was needed because Embraer Executive Aircraft customers have delayed deliveries of business jets due to the coronavirus pandemic, cutting the firm’s revenues.

“In addition, the commercial sector is significantly constrained in its lending capacity due to the pandemic and its ability to make new loans has been reduced,” EXIM said.

Boeing has traditionally been EXIM’s largest single customer, using the agency to finance jetliner sales to many foreign airlines. (Reporting by David Lawder and Marcelo Rochabrun; editing by Richard Pullin)

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