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Bond Market News
Gol Reaches Agreement with Abra to Exit Chapter 11
November 7, 2024
Brazilian airline Gol has reached an agreement with its major shareholder, Abra, to help it emerge from bankruptcy. This involves converting $950mn of Abra’s secured debt into Gol shares as part of the Chapter 11 bankruptcy process, which was filed in January. The restructuring plan aims to significantly reduce Gol’s debt, with up to $1.7bn of pre-bankruptcy debt and $850mn in other obligations being either converted into shares or extinguished. Abra will also receive approximately $950mn in new Gol shares, contingent on resolving certain issues, alongside $850mn in restructured debt. Gol plans to raise up to $1.85bn through a Chapter 11 exit credit line. This new capital will be used to pay off existing debtor-in-possession obligations and to provide additional liquidity for Gol’s future operations. Gol is targeting a completion of its reorganization and exit from Chapter 11 by end-April 2025, and hopes to present the final plan before end-2024. Abra, which also holds a significant stake in Avianca, continues to be a key investor in both airlines.
Gol’s dollar bonds were trading stable with its 8% 2026s at 71.3 cents on the dollar.
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