As the second-largest airline in Brazil, GOL Linhas Aereas (GOL) filed for bankruptcy in January 2024 after accumulating over $3.8 billion in debt waiting for delayed deliveries of Boeing (BA) aircraft throughout 2023.
In December 2024, a Brazilian bankruptcy judge approved a reorganization plan that would see the Rio-based airline commonly called just GOL convert $1.7 billion of debt into equity and raise $1.85 billion of new investor financing.
On May 20, the airline announced that a U.S. judge also confirmed a Chapter 11 emergence plan that includes securing $1 billion in debtor-in-possession funds and negotiating its plane leases to bring down its annual costs by $1.1 billion.
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GOL promises to ‘move forward with a strong liquidity position’
“Upon emergence, GOL will move forward with a strong liquidity position of approximately $900 million USD and significantly reduced leverage of 5.4x at exit, and projected net leverage of 2.9x by year-end 2027,” the airline announced on May 20.
With the new milestone reached, GOL claimed to investors that it will be able to emerge from bankruptcy proceedings by June 2025.
As the second-largest airline in Brazil and the primary choice for those seeking a low-cost option, GOL has continued day-to-day service flying both within Brazil and to nearby South American countries throughout the bankruptcy.
The airline has strong brand recognition in Brazil and has received significant interest among investors looking to put money to help rescue it in exchange for equity.
GOL Linhas Aéreas is a Brazilian low-cost airline.
Image source: Shutterstock
This is how much GOL shares soared on bankruptcy exit news
Earlier speculation on GOL’s bankruptcy emergence floated the possibility of acquisition by carriers such as Azul (AZUL) or investment from American Airlines (AAL) but updates now show that emergence will take a different path.
Upon news of the court approval, GOL stock soared by more than 8% on the São Paulo stock exchange.
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Other details of the restructuring plan include GOL receiving approximately $150 million USD in debentures and $340 million USD in receivables factoring from Brazilian banks to improve liquidity. As part of its role in helping a major airline in the country, the Brazilian government has also agreed to reduce unpaid government taxes and other contingencies by $750 million USD.
On May 1, GOL revealed that a group of investors holding 8% senior secured notes set to mature in 2026 had agreed to put $125 million to get the airline out of bankruptcy. The investor group has been referred to by GOL as Ad Hoc Group.
At the start of April, GOL also reworked its agreement to purchase 92 of Boeing’s Max 737 planes which then frees up $235 million that it can put toward paying creditors. GOL’s current fleet includes 139 Boeing 737s, of which 54 are the modern MAX 8 ones.
“As the Company continues to execute its proven network expansion strategy, GOL is well-positioned to deploy its rebuilt capacity both domestically and internationally by leveraging its significant presence in key Brazilian hubs,” the airline said further. “In particular, its strategic global partnerships allow for adding new service profitably to new or underserved domestic and international routes.”
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