Brazilian budget carrier Gol is filing an initial proposed plan to re-organise under US Chapter 11 protection, following an agreement between the airline, its largest secured creditor Abra Group, and other parties.
Filing of the plan, says Gol, implements “significant investment” of new capital and marks an “important milestone” towards completion of its financial and operational restructuring.
Under the plan Gol will convert into equity – or otherwise extinguish – up to $1.7 billion of debt, as well as up to $850 million of other obligations.
The airline says this is likely to result in “significant dilution” of its existing equity, given that its most recent financial quarter showed a net loss of R$830 million ($136 million) and total net debt of R$27.6 billion ($4.5 billion).
Abra Group has agreed to receive around $950 million of new equity – and possibly more – plus $850 million of “take-back debt”, according to the agreement, to satisfy $2.8 billion of debt claims.
The take-back debt includes a $250 million sum which is mandatorily convertible into new equity, 30 months after Gol emerges from Chapter 11.
Gol will assume restructured aircraft leases, following agreements reached with its lessors.
The airline also aims to raise up to $1.85 billion in new capital to support its post-Chapter 11 growth strategy.
Up to $330 million of this new capital could be sourced from equity financing from third-party investors.
Gol’s bankruptcy court filing includes a plan summary which details the treatment of its various creditors, and provide information on whether creditors should accept or reject the plan in a vote.
The carrier will seek the court’s approval of the plan summary at a hearing set for 15 January 2025.
If the court approves the summary disclosure, Gol will begin the process of seeking sufficient votes to support the plan and confirm it.
Gol says the filing of its proposals with the court positions the carrier to “stay on track for a timely emergence” from Chapter 11.
