The airline hopes to emerge from bankruptcy by the end of April 2025 after submitting its reorganization plan.
Brazilian airline Gol has reached an agreement with Abra, its holding company, and some of its subsidiaries and creditors, securing at least US$950 million from its parent company to emerge from Chapter 11 of the United States Bankruptcy Law.
Specifically, Abra has committed $2.8 billion in funded debt claims and has agreed to receive a minimum of $950 million in new equity from this amount, subject to the resolution of certain outstanding matters, as well as a minimum of $850 million in recoverable debt.
Of the recoverable debt, US$250 million will be mandatorily convertible into new equity during the 30-month duration of Chapter 11 or thereafter, based on Gol meeting certain valuation parameters.
The agreement also provides for Gol to file a Chapter 11 reorganization plan that will allow it to significantly deleverage by converting into equity, or otherwise extinguishing, up to $1.7 billion of its pre-bankruptcy funded debt and up to $850 million of other obligations.
Gol's general unsecured creditors will also receive new shares valued at approximately US$235 million and possibly more, depending on the resolution of certain outstanding matters.
LIQUIDITY TO GET OUT OF BANKRUPTCY
In total, Gol plans to raise up to US$1.85 billion in new capital, of which US$950 million has already been secured, with the aim of having additional liquidity to support its future strategy after its emergence from bankruptcy.
Gol expects to file its Chapter 11 reorganization plan with the U.S. Bankruptcy Court before the end of 2024 and emerge from bankruptcy proceedings by the end of April 2025.
"Reaching this agreement is another important step in our efforts to strengthen our financial position and drive Gol's long-term success," said the airline's CEO, Celso Ferrer.
For his part, Abra Group CEO Adrian Neuhauser said he was pleased to be moving forward with the support of his main shareholders, reflecting his "confidence" in the business plan and the significant opportunities that Gol has ahead of it.
"Gol is expected to emerge from its Chapter 11 process with a dramatically improved liquidity position and a deleveraged balance sheet with a very competitive unit cost and a strong network," he added.
