Brazilian low-fare carrier GOL has filed for Chapter 11 bankruptcy protection in the US in a bid to restructure its finances and operations.
The airline, part of the Abra Group, which also controls Avianca, is struggling to service over USD 2.5 billion in debt and other obligations. Abra is both GOL’s majority investor and largest secured creditor.
The proposed plan, filed with the US Bankruptcy Court, aims to significantly deleverage GOL’s balance sheet. USD 1.7 billion of pre-petition debt and up to USD 850 million of other obligations will be converted to equity or extinguished.
Abra Group plans to convert a significant portion of its USD 2.8 billion debt claim into equity and shoulder USD $850 million in “take-back” debt, some of which may later convert to equity.
This debt-to-equity swap will inevitably result in dilution for existing shareholders, but it’s considered a necessary step to ensure GOL’s long-term sustainability and unlock future growth opportunities.
GOL aims to raise up to USD 1.85 billion in new capital to bolster its liquidity and support its growth strategy after it emerges from Chapter 11.
“This is a pivotal moment for GOL,” said a GOL spokesperson. “The restructuring plan allows us to address our financial challenges head-on and emerge stronger, with a sustainable platform for future growth.”
The plan is supported by Abra and GOL’s unsecured creditors committee. A key hearing is scheduled for 15 January 2025, where the Bankruptcy Court will consider approving the disclosure statement and commencing the creditor voting process.
GOL was founded in 2001 with the slogan: “Being the First for All”. The company has 13,900 employees and operates a fleet of 141 737-700, 737-800, 737-8 MAX and 737-800 BCF aircraft.
Photo: CC0 1.0 Universal
A Boeing 737-800 in GOL livery.
