GOL Announces Important Milestone in Legal Financial Restructuring

Rhea-AI Summary

GOL Linhas Aéreas Inteligentes S.A. receives approval for US$950 million in new financing to support ongoing operations, ensuring the continuation of safe and reliable air transportation without interruption. The company will continue operating in the normal course during the legal financial restructuring process initiated on January 25, 2024. GOL will honor commitments to business partners, suppliers, and employees, with immediate access to part of the new liquidity. The company's purpose is to be the first for all, aiming to benefit employees, customers, and partners. The U.S. Chapter 11 process is aimed at strengthening the company's financial position while continuing to operate as usual, subject to supervision and approval by the U.S. court system.

Positive

• GOL receives approval for US$950 million in new financing
• The company will continue operating in the normal course during the legal financial restructuring process
• GOL will honor commitments to business partners, suppliers, and employees
• The U.S. Chapter 11 process is aimed at strengthening the company's financial position while continuing to operate as usual

Negative

• None.

Insights

Financial Analyst

The recent approval for GOL Linhas Aéreas Inteligentes S.A. to access US$950 million in debtor-in-possession (DIP) financing is a significant event that can have substantial implications on the company's financial stability and stock market performance. The immediate access to new liquidity is crucial as it allows the company to maintain operations and service commitments during its restructuring process. This is particularly important for maintaining investor and customer confidence during a period that could otherwise be marked by uncertainty.

By securing DIP financing, GOL is not only able to continue business operations but also to pursue its long-term strategies aimed at enhancing affordability and customer experience. The market often reacts positively to news of successful DIP financing as it suggests a path towards financial recovery and operational continuity. However, it's important to monitor the company's ability to meet the terms of the financing and its progress in restructuring, as these will be key factors in its long-term financial health and stock valuation.

Market Research Analyst

The airline industry is highly competitive and sensitive to changes in economic conditions and consumer behavior. GOL's commitment to providing low-cost air travel services in the face of financial restructuring could provide a competitive edge in the Brazilian domestic market. The assurance that flights will operate as scheduled and that customer reservations will be honored is likely to preserve market share and customer loyalty during the restructuring period.

It is also noteworthy that the company has managed to maintain its codeshare and interline agreements, which are essential for expanding reach and offering seamless travel experiences. This aspect of the announcement indicates a strategic focus on maintaining partnerships and network connectivity, which is vital for airlines operating in the interconnected global travel industry.

Legal Expert

The approval by the U.S. Bankruptcy Court signifies a critical step in GOL's Chapter 11 process, which is designed to allow companies to restructure their financial obligations while continuing operations. The Chapter 11 process is a common route for airlines seeking to reorganize, as it provides protection from creditors and an opportunity to renegotiate contracts and reduce debt. The court's swift action in granting interim access to financing suggests a recognition of the urgency and importance of maintaining airline operations, which is a positive sign for GOL's legal restructuring efforts.

Furthermore, the legal precedent set by other airlines that have successfully emerged from Chapter 11, such as American Airlines and Delta Air Lines, provides a framework for GOL's potential path to recovery. Stakeholders should monitor the proceedings closely, as the outcomes of these cases can influence the company's legal obligations, financial structure and operational strategies moving forward.

Receives Approval Regarding US$950 Million in New Financing to Support Ongoing Operations

Continuing to Provide Safe and Reliable Air Transportation Without Interruption

All Flights Operating as Scheduled and All Tickets and Reservations Remain in Place

SÃO PAULO, Jan. 29, 2024 /PRNewswire/ -- GOL Linhas Aéreas Inteligentes S.A. ("GOL" or "Company") (B3: GOLL4), a leading domestic airline in Brazil, today announced that it has received key approvals from the United States Bankruptcy Court for the Southern District of New York (the "U.S. Court") in the Company's legal financial restructuring initiated on January 25, 2024. The approvals granted by the U.S. Court at the "First Day" hearing ensure that GOL will continue operating in the normal course during the process, as previously communicated.

As expected, the U.S. Court approved interim access to the US$950 million in debtor-in-possession ("DIP") financing that was committed by members of the Ad Hoc Group of Abra Bondholders, as well as certain other Abra bondholders. The Company intends to seek final approval of the financing at a hearing in the coming weeks. In the meantime, GOL will have immediate access to part of the new liquidity.  With this approval, GOL will honor commitments to business partners and suppliers of goods and services provided on or after the filing date of January 25, 2024, and will continue paying employee salaries, wages and benefits.

With access to the new financing, the Company will continue to provide safe and reliable air travel service at a low cost, providing the best travel experience to Customers. Customers can continue to arrange travel and fly in the same manner they always have, including the use of tickets and vouchers, and the accrual, purchase and use of miles earned through Smiles. GOL's codeshare and interline agreements remain available to Customers.

"We are pleased by this successful start to our legal financial restructuring. Obtaining the U.S. Court's authorization to access new financing will enable GOL to continue operating in the normal course, as we anticipated," said Celso Ferrer, Chief Executive Officer. "GOL's purpose is 'Being the First for All', and we initiated this process not only for the benefit of our Company and our Employees, but to make us an even stronger airline for our Customers, suppliers and all our partners. Moving forward with the support of our lenders, we are confident that we will continue to advance our long-term strategies, including improving affordability, the travel experience and Customer choice. We thank our talented team and dedicated partners, suppliers and passengers for their continued support."

Information on Chapter 11

The U.S. Chapter 11 process is a well-established and flexible legal framework for restructuring businesses with operations in multiple jurisdictions. The legal process allows for companies to strengthen their financial position while continuing to operate as usual, subject to supervision and approval by the U.S. court system. The Chapter 11 process has been used successfully by many international airlines, including Aeroméxico, American Airlines, Avianca Colombia, Delta Air Lines, LATAM Airlines, and United Airlines.  Scandinavian Airlines is currently also reorganizing under Chapter 11.

GOL is confident that this process is in the best interests of its stakeholders, including employees and customers, who will continue to benefit from the Company's affordable, safe and reliable flights as well as its best-in-class service.

Additional Information 

Additional information regarding the Company's court-supervised process is available at www.GolFirstForAll.com.

Court filings and other information related to the proceedings are available on a separate website administrated by the Company's claims agent, Kroll Restructuring Administration LLC ("Kroll"), at https://cases.ra.kroll.com/GOL, or by calling Kroll at 844.553.2247 (U.S./Canada) (toll free) or +1.646.777.2315 (International).

Advisors
In connection with its restructuring efforts, GOL is working with Milbank LLP as legal counsel, Seabury Securities LLC as restructuring advisor, financial advisor and investment banker, and AlixPartners, LLP as financial advisor.

Contacts

Investor Contact
ri@voegol.com.br
www.voegol.com.br/ir 

U.S. Media Contact
Joele Frank, Wilkinson Brimmer Katcher:
Leigh Parrish / Jed Repko
lparrish@joelefrank.com / jrepko@joelefrank.com
+1 212 355 4449

South America Media Contact
In Press Porter Novelli
gol@inpresspni.com.br

About GOL Linhas Aéreas Inteligentes S.A.

GOL is the main Brazil airline. Since it was founded in 2001, the Company has the lowest unit cost in Latin America, thus democratizing air transport. The company has alliances with American Airlines and Air France-KLM, besides several codeshare and interline agreements, available to Customers, bringing more convenience and simple connections to any place served by these partnerships. With the purpose of "Being the First for All", GOL offers the best travel experience to its passengers, including: the largest number of seats and more space between seats; the greatest platform with internet, movies and live TV; and the best frequent-flyer program, SMILES. In cargo transportation, Gollog delivers orders to different regions in Brazil and abroad. The Company has a team of over 14,000 highly qualified aviation professionals focused on Safety, GOL's #1 value, and operates a standardized fleet of 141 Boeing 737 aircraft. For further information, visit www.voegol.com.br/ri.

View original content:https://www.prnewswire.com/news-releases/gol-announces-important-milestone-in-legal-financial-restructuring-302047068.html

SOURCE GOL Linhas Aéreas Inteligentes S.A.

FAQ

What is the purpose of GOL's legal financial restructuring process initiated on January 25, 2024?

The purpose is to strengthen the company's financial position while continuing to operate as usual.

What is the amount of new financing GOL has received approval for?

GOL has received approval for US$950 million in new financing.

What is the company's purpose according to the PR?

GOL's purpose is to be the first for all, aiming to benefit employees, customers, and partners.

What is the U.S. Chapter 11 process mentioned in the PR?

The U.S. Chapter 11 process is aimed at strengthening the company's financial position while continuing to operate as usual.