#Brazil #São Paulo #Chapter 11 #2026 Notes #GOL Linhas Aéreas

GOL Linhas Aéreas Secures Settlement with 2026 Noteholders

GOL Linhas Aéreas Inteligentes S.A., a prominent airline in Brazil, has recently announced a significant settlement with an ad hoc group representing holders of its 2026 Senior Secured Notes. This development is a crucial step in the company’s ongoing efforts to navigate its Chapter 11 reorganization process.

The agreement reached with the ad hoc group aims to resolve disputes regarding the compensation mechanisms under the company’s Chapter 11 plan. Notably, GOL is set to receive commitments from this group, amounting to $125 million, as part of the broader $1.9 billion exit financing notes package essential for the company’s financial resurgence.

Details of the Settlement

As part of the settlement, the members of the ad hoc group will commit to purchasing $125 million worth of exit financing notes. In addition, Castlelake, L.P., and Elliott Investment Management, L.P. have agreed to amend their existing $1.25 billion backstop arrangement, facilitating the execution of this settlement. With these commitments, GOL has now established at least $1.375 billion in exit debt financing, considerably strengthening its groundwork for a successful exit from bankruptcy.

The terms of the settlement stipulate that the holders of the 2026 Senior Secured Notes—those who are part of the ad hoc group—will sign a Plan Support Agreement. This agreement indicates their intent to support the amended Chapter 11 plan, which is pivotal for GOL’s path towards restructuring and financial stability.

Plan Support Agreement and Financial Recovery

Under the revised plan, any holders of the 2026 Senior Secured Notes who opt out of participating in the exit financing will still be able to receive up to $100 million in non-exchangeable take-back notes, ensuring some level of recovery for all stakeholders. Moreover, for those participating in the exit financing—including non-ad hoc group members—a chance to acquire an additional $50 million in exit financing is being provided. This aspect is critical as it aims to engage a broader group of creditors in the recovery process, offering modified terms for those who stay invested in GOL’s future.

GOL has outlined its intention to file an amended plan with the United States Bankruptcy Court shortly. This is anticipated to occur in the coming weeks, with an eye on emerging from Chapter 11 by June 2025. A significant element of the reorganization will be a reduction in the company’s overall debt load, slated to decrease by as much as $1.7 billion through equity conversions and debt extinguishments, alongside the shedding of approximately $850 million in other financial obligations.

Implications for Shareholders and Stakeholders

It is important to highlight that this process will likely result in substantial dilution of GOL’s existing shares. The conversion of debt into equity will base shareholder dilution on GOL’s economic valuations prior to the conversion, in line with regulations under Brazilian law. GOL is committed to transparency throughout this transition period, ensuring stakeholders are informed and can make decisions based on up-to-date information.

In sum, GOL Linhas Aéreas is on a determined path to restructuring its financial framework through this settlement with noteholders. The company's proactive approach in negotiating terms and securing support from major stakeholders will be vital in its efforts to regain stability and maintain operational capacity as it moves towards a more sustainable future.

About GOL Linhas Aéreas

Founded in 2001, GOL is one of Brazil's foremost airlines, committed to making air travel accessible to all. With a partnership with major airlines and operating a standardized fleet of 138 Boeing 737 aircraft, GOL continues to prioritize connectivity and efficiency in air transport. For more information about GOL and its operations, visit www.voegol.com.br/ir.