Gol files Chapter 11 re-organisation plan with court ahead of vote solicitation

Brazilian budget carrier Gol is filing an initial proposed plan to re-organise under US Chapter 11 protection, following an agreement between the airline, its largest secured creditor Abra Group, and other parties. Filing of the plan, says Gol, implements “significant investment” of new capital and marks an “important milestone” towards completion of its financial and operational restructuring. Under the plan Gol will convert into equity – or otherwise extinguish – up to $1.7b of debt, as well as up to $850m of other obligations. The airline says this is likely to result in “significant dilution” of its existing equity, given that its most recent financial quarter showed a net loss of R$830m ($136m) and total net debt of R$27.6b ($4.5b). Abra Group has agreed to receive around $950m of new equity – and possibly more – plus $850m of “take-back debt”, according to the agreement, to satisfy $2.8b of debt claims. The take-back debt includes a $250m sum which is mandatorily convertible into new equity, 30 months after Gol emerges from Chapter 11. Gol will assume restructured aircraft leases, following agreements reached with its lessors. The airline also aims to raise up to $1.85b in new capital to support its post-Chapter 11 growth strategy.<br/>