Brazil’s Gol says bankruptcy exit to involve $1.5 billion capital injection

By Thomson Reuters May 27, 2024 | 8:46 AM

SAO PAULO (Reuters) – Brazilian airline Gol expects its exit of Chapter 11 bankruptcy proceedings to involve a $1.5 billion capital injection through the issuance of new shares and the refinancing of $2 billion in debt, it said in a securities filing on Monday.

Gol, one of Brazil’s largest carriers, filed for bankruptcy protection in the United States earlier this year after struggling with heavy debt and delayed deliveries from planemaker Boeing.

The estimates for it to emerge from the restructuring process are part of a broader five-year strategic plan unveiled by the firm, which includes increasing its fleet and boosting operating margins in the coming years.

Gol said it would hold a “competitive process” starting in June to evaluate proposals to finance its bankruptcy exit, adding the process should last at least until the end of the third quarter.

The carrier will also study “any viable, competitive alternative transactions, including opportunities presented by potential sources of equity and debt capital” as part of the move, it said.

“While Gol anticipates a successful exit financing process, there can be no assurance that the process will result in any transactions,” the company added.

Earlier this month, Gol and Brazilian rival Azul announced a codeshare agreement, connecting their networks and frequent flyer programs in a move that reignited speculation about a potential merger.

(Reporting by Gabriel Araujo; Editing by Luana Maria Benedito, Kirsten Donovan and Andrea Ricci)