Brazilian airline Gol has reached an agreement with its holding company Abra and some of its subsidiaries and creditors to receive at least $950 million from its parent company to emerge from Chapter 11 of the U.S. Bankruptcy Code. Specifically, Abra has committed $2.8 billion in funded claims and has agreed to receive at least $950 million of that amount in the form of new equity, subject to the resolution of certain outstanding issues, and at least $850 million collectible claims. Of the recoverable debt, $250 million will be mandatorily converted into new equity during the 30-month period of Chapter 11 or thereafter, depending on whether Gol meets certain valuation metrics.
Additionally, the agreement requires Gol to file a Chapter 11 plan of reorganization, which will allow the company to undertake significant debt reduction by reducing up to $1.7 billion of its pre-bankruptcy funded debt and up to $850 million -Converts dollars of other obligations into equity or otherwise extinguishes them. Gol’s general unsecured creditors will also receive new shares valued at approximately $235 million, and potentially more, depending on the resolution of certain outstanding issues.
LIQUIDITY TO EXIT BANKRUPTCY
In total, Gol expects to raise up to $1.85 billion in new capital, of which it has already secured $950 million, to provide additional liquidity to support its post-exit strategy going forward to support bankruptcy. Gol expects to file its Chapter 11 plan of reorganization with the U.S. Bankruptcy Court before the end of 2024 and to complete the bankruptcy process by the end of April 2025. “This agreement is another important step in our efforts to strengthen our financial position and drive the long-term success of Gol,” said the airline’s CEO, Celso Ferrer.
© 2009 – 2024 agência latinapress News & Media. All rights reserved. All content on this website is protected by copyright. Reproduction and distribution permitted only with prior written permission from IAP. Articles and reader reports marked by name do not necessarily reflect the opinion of the editorial team. For submissions and feedback, please use the contact form.
