Gol company requests judicial recovery in the USA
The airline reported on Thursday that it has filed a request for judicial recovery in the United States. According to the company, this decision is essential to obtain financial resources and carry out a restructuring of its finances.
GOL Linhas Aéreas has just filed for Judicial Recovery in the USA, called Chapter 11 - Photo Reproduction/Internet
Brazilian airline Gol Linhas Aéreas Inteligentesannounced this Thursday (25) its decision to start the judicial recovery process in the United States, covering both the main company and its subsidiaries. The company's justification for this measure is the reorganization of its short-term financial responsibilities, with the aim of "strengthen your capital structure to ensure long-term sustainability". The amount of the company's debts is estimated at R$20 billion.
In a press release, Gol clarified that all flights are proceeding as planned, ensuring the maintenance of the validity of all airline tickets and reservations. This position was reiterated by the company's CEO, Celso Ferrer, during an interview with journalists. The company guarantees that the Smiles program will remain unchanged and will continue to be accessible to customers.
"The process aims to optimize Gol to sustain growth. We should not reduce the number of aircraft in service. The focus is to address liabilities during this period and organize the flow from now on", stated the company in the note.
Motivations for Judicial Recovery in the USA
In practice, the company used a legal mechanism in the United States called "Chapter 11" (similar to the Brazilian judicial recovery), which is used by companies to suspend the execution of debts and carry out financial and operational restructuring. The petition was filed in the Bankruptcy Court for the Southern District of New York. Gol's CEO, Celso Ferrer, stated that the decision to appeal to North American justice was taken based on the recommendation of the company's lawyers in the United States. Despite this measure, the company will continue its operations normally.
Furthermore, Gol announced that it had secured financing of US$950 million to support its activities, through debtor-in-possession modality (debtor in possession, in free translation), a form of loan carried out in the context of judicial recovery. As stated in the note, the airline will seek to access these resources during the First Day hearing with the United States Court, scheduled for the next few days.
Debt restructuring
Obtaining financial resources is subject to obtaining judicial approval. According to the executive director of Gol, The expectation is that the US$950 million will soon be available, as the first stages of the legal process advance. Ferrer also highlighted that the financing will be carried out by a group of investors who are already familiar with the company. These investors are part of the Ad Hoc Group of Bond Holders (those who hold debt securities) of Abra, the holding company that controls Gol, in addition to other Bond Holders linked to Abra.
"Together with the cash generated by ongoing operations, [the financing] will provide substantial liquidity to support operations, which continue normally during the financial restructuring process," he concluded, in a note from the airline."
What Caused the Request for Judicial Recovery
According to analysts, Gol presents robust operational indicators due to the strong demand for air travel in Brazil. However, the high leasing expenses (aircraft rental contracts) and interest have put pressure on its cash flow, negatively impacting its debt profile. Additionally, the company faced capacity challenges due to delays in Boeing aircraft deliveries, as highlighted by the CEO, which limited Gol's growth at the desired pace.
Last year, Gol's market share in the Brazilian aviation industry was 33%, second only to Latam Brasil, as measured by passenger revenue per kilometer, a metric that measures traffic.
