Gol Secures Key Financing of $1.25 Billion to Exit from Bankruptcy
The Brazilian airline Gol has reached a crucial agreement with investors for the purchase of up to $1.25 billion in debt instruments, marking a significant step forward in its Chapter 11 bankruptcy restructuring process in the United States.
Following the announcement, Gol’s shares, traded on the Sao Paulo Stock Exchange, rose by 9%, though they later pared gains to close 5% higher.
Details of the Financial Agreement
As part of the deal, investors have committed to acquiring up to $1.25 billion of the $1.9 billion in debt instruments Gol will issue during this process. The funds will be used to settle the airline’s obligations under its Debtor-in-Possession (DIP) financing.
Investment advisors Castlelake and Elliott Investment Management have pledged these funds on behalf of their clients, according to a court document filed late Sunday and cited by Reuters. The minimum amount committed by both firms totals $750 million.
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Use of Funds
Gol stated that, in addition to meeting its financial obligations, the proceeds will also cover transaction costs and strengthen its working capital, ensuring stable operations after exiting Chapter 11.
While this financing represents a major milestone, the airline is also exploring other options for financial recovery, including issuing new debt and seeking equity investments.
Impact on Financial Structure
Gol has indicated that this measure will significantly reduce its financial leverage, though it will also lead to substantial dilution of its current equity.
The airline, which filed for bankruptcy in early 2024, aims to solidify its position as a strong player in the aviation market through this restructuring, ensuring its long-term viability.
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