Brazilian e-flight manufacturer may go public, surprising analysts

Eve, the Brazilian company that currently has an order book worth $5 billion, could produce electric planes on several continents. Shares of aircraft manufacturer Embraer rose more than 16 percent to over 23 reals in Brazil and more than 15 percent to over 16 dollars on Wall Street after the company announced that its electric aircraft subsidiary Eve will be listed on the New York Stock Exchange (NYSE).

The Brazilian group has already agreed with NYSE-listed special purpose investment company Zanite (SPAC) to merge Eve into the latter company on the North American exchange. In addition to the merger, the transaction, which is expected to increase the value of the company to USD 2.9 billion, will also include the entry of additional financial and strategic investors. The latter include BAE Systems and Rolls-Royce.

Trading in Eve’s shares is expected to start in the second quarter of next year, after the deal closes. The company plans to use the $512 million of cash raised through capital market operations to invest in the development of flying taxis in the meantime. The Embraer subsidiary currently has an order book of more than $5 billion, with customers including helicopter operators, lessors and ride-sharing companies.

Embraer will retain more than 80 percent of Eve’s shareholding following the listing. Based on this, equity analysts at Itau BBA believe the transaction will exceed their forecasts, as Eve’s valuation of $2.9 billion represents an incremental value of $12 per share per Embraer share listed on the US stock exchange, compared to their projections of only $5.7.

Francisco Gomes Neto, CEO of Embraer, said in an interview that Eve wanted to deliver to different continents, so production would be in several locations. Within ten years, they are aiming for $4.5 billion in revenue and a 15 percent share of the global urban air mobility market. Embraer will provide the infrastructure for Eve, including engineers, test tracks and simulation equipment for the projects.