GOL Linhas Aereas Inteligentes has received approval from the US Bankruptcy Court for its Chapter 11 plan of reorganisation. The company expects to emerge from its restructuring process in early June 2025. Following the plan, Abra will remain as the airline's largest indirect shareholder.
Now the plan has been approved, the company's shareholders will meet on May 30 to approve the capital increase as part of its exit plan. The company's board will propose a capital increase of 5.3bn Brazilian reals ($940 million) to 19.3bn reals ($3.4bn) through the issuance of 3.6 trillion to 13.1 trillion common shares and 430.3bn to 1.55 trillion preferred at the shareholders meeting.
The company had recently secured commitments for exit financing with a five-year term totalling $1.9bn, which will provide “ample liquidity” to repay the company's $1bn debtor in possession (DIP) financing maturity in full upon emergence, while also providing additional liquidity to support its business plan. The DIP financing allowed GOL to invest in its aircraft fleet.
In addition, the company negotiated concession packages totalling $1.1bn from lessors covering all aircraft in its fleet, including financial support to clear its maintenance backlog while also providing permanent savings on rent and end of lease obligations. The company also secured support from Brazilian banks and is finalising an agreement with the Brazilian government.
The company's agreement with Boeing on modifications of its purchase contracts will provide $262 million of concessions and incremental liquidity through 2029. GOL has also begun implementing its $181 million annual profit improvement programme, along with negotiating a plan support agreement with Abra Group and the unsecured creditors committee to deleverage GOL through a reduction of up to around $1.6bn of prepetition funded debt and up to $0.8bn of other obligations.
GOL said it is now in the position to emerge from bankruptcy with a “meaningfully strengthened balance sheet” and a “positive business momentum”.
Upon emergence, GOL expects to be in a liquidity position of around $900 million and a significantly reduced leverage of 5.4x at exit. By the end of 2027, the company expects a net leverage of 2.9x.
“GOL is well-positioned to deploy its rebuilt capacity both domestically and internationally by leveraging its significant presence in key Brazilian hubs,” GOL read in a statement.
The airline added its global partnerships will allow to add new profitable services.
Milbank acted as legal advisors to GOL for its restructuring efforts. Seabury Securities acted as investment banker and lead placement agent for its $1.9bn exit notes, financial advisor and sole restructuring agent. BNP Paribas Securities acted as bookrunner and placement agent for the exit notes and AlixPartners as financial advisor. In addition, Lefosse Advogados acts as GOL's Brazilian legal advisor.