Brazilian airline Azul said on Tuesday it has finalized a debt restructuring process regarding financial obligations with bondholders, aircraft makers and firms that lease planes, according to a securities filing.

Brazilian carrier Azul has concluded its restructuring process by agreeing with bondholders, lessors and aircraft manufacturers to eliminate R$12.3 billion ($2.1 billion) in debt.

Brazil airlines Azul and GOL are set for merger talks which could create the dominant player in aviation in the country. They signed a MoU after getting tentative approval from Brazilian President Lula da Silva. The plan is to combine the businesses of Azul and GOL parent Abra. It would give the new business a 60% share of the aviation market.

Azul said the process included the termination of almost $1.6 billion in debt from its balance sheet, while it also raised $525 million in fresh money. The firm said that, with the conclusion of the talks, its financial leverage measured by a net debt to EBITDA ratio falls to 3.4 times from 4.8 times.

SAO PAULO (Reuters) -Brazilian airline Azul said on Tuesday it has finalized a debt restructuring process regarding financial obligations with bondholders, suppliers and plane lessors, according to a securities filing.