The Brazilian airline GOL Linhas Aéreas has reached a comprehensive financial restructuring agreement that is expected to significantly reduce its debt burden.
Through the Chapter 11 bankruptcy proceedings in the US, the company plans to restructure about $2,5 billion in liabilities. Much of this debt is to be eliminated through equity conversions and more favorable credit terms. The parent company Abra Group, which also includes Avianca and Wamos Air, supports this plan and wants to provide up to $950 million in new equity and $850 million in repurchase debt. Of this debt, $250 million could also be converted into equity under certain conditions by 2027.
The aim of the restructuring is to stabilize GOL's financial position and strengthen its market position through new investments in the fleet. In total, the company plans to raise up to $1,85 billion in capital through new, secured debt to cover ongoing obligations and finance its expansion strategy. The agreement also provides for participation by unsecured creditors, who could receive up to $235 million in equity if certain financial targets are met.
After the planned termination of the insolvency proceedings, expected in April 2025, GOL will emerge from the proceedings with improved liquidity and a significantly reduced debt burden, which should strengthen the company's long-term competitiveness and flexibility.
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