Brazilian airline Gol has filed a five-year monetary plan with a U. S. court as part of its bankruptcy proceeding that includes a refinancing of $2 billion of debt, a capital buildup and new deals with aircraft lessors.
The monetary plan will “serve as the basis” for the reorganization of the Sao Paulo-based airline, it revealed on May 27.
Gol had filed for Chapter 11 bankruptcy in a U. S. court in January to restructure its bonds. It is the fourth Latin American airline to continue with this procedure after the disruptions caused by the Covid-19 crisis. In 2020, Aeromexico, Avianca and LATAM Airlines restructured their finances under Chapter 11 rules.
“We are pleased to take a vital step in our monetary restructuring process,” said CEO Celso Ferrer. “Since the inception of this process, Gol has continued to perform effectively on the overall course and has demonstrated strong execution of our business strategy while maintaining a disciplined technique to charge management. “
The five-year plan aims to return national capacity to pre-coronavirus levels by 2026 and expand domestic and foreign networks. The airline aims to increase its exclusively Boeing 737 fleet to 169 aircraft by 2029, up from 141 aircraft at the end. from the fourth quarter of 2023. De those, 91 were previous-generation NGs, 44 were Max variants and six were freighters.
Gol still has 101 orders for other Max aircraft, 64 examples of the Max 8 and 37 of the non-certified Max 10 model.
The airline’s plan also sees its EBITDA margin, expressed as general profit, “depressed” in 2024, at around 23%, compared to 27% in 2023. However, it is expected to recover to around 29% by 2025. , 30% in 2026 and 34% in 2029.
The airline has also “successfully renegotiated agreements for most of our aircraft” with lessors and is expanding the length of its operating fleet and capacity.
On May 24, the bankruptcy court approved deals for 113 aircraft and 48 spare engines that come with “significant lease concessions” as well as “significant engine maintenance supports,” the company says. Lately, Gol is reviewing competitive lease offers that cover almost all of its remaining aircraft and will make decisions on those aircraft “shortly”.
“In total, the lessors’ concessions deserve to provide the company with the money needed to overhaul all the necessary engines and rebuild its capacity to levels commensurate with the five-year plan,” the company said.
As a result, Gol expects capacity in 2024 to be temporarily lower than in 2023, which will also have an effect on earnings. Gol also obtained approval to finance new aircraft and engine deliveries and plans to continue accepting new deliveries of 737 Max aircraft during the restructuring. procedure and subsequently.
Gol’s exit financing procedure will involve the refinancing of approximately $2 billion of debt and plans to raise approximately $1. 5 billion of new capital through the issuance of new shares. This accumulation of capital will allow the airline to pay its debtor in existing possession. (DIP) of $1 billion, while adding more liquidity to the balance sheet. Gol says it will solicit proposals through a competitive procedure starting in early June, through the third quarter and probably the fourth quarter as well.
“Although Gol expects a successful investment process, there is no guarantee that the process will result in transactions,” the company states.
Ferrer adds that the five-year plan “serves as a transparent roadmap for our next phase, in which we will continue to advance our long-term methods aimed at improving the travel experience, adding travel affordability and customer selection, in order to expand. “our position as the leading airline in Latin America.
“With a transparent plan in place, we can start preparing for the competitive investment procedure that we will start in a while to make sure that Gol has the most powerful monetary base imaginable after we come out of Chapter 11,” he says. .
Gol partnered with Colombian company Avianca in May 2022 to shape the Abra Holding Group, which presented itself as an opportunity for airlines to compete more in foreign shipping and long-haul markets and launch new flights. Under the terms of the agreement, either airline will retain its individual brands, methods and groups, a move aimed at creating long-term stability in the post-Covid-19 environment.
The route is controlled by Avianca’s main shareholders and Gol’s majority shareholder, and led by Latin American air transport veterans. Adrián Neuhauser, former CEO of Avianca, CEO of Abra in early 2024.
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