Brazil’s Gol releases new five-year plan ahead of Chapter 11 exit
10:11 am Wednesday, January 15th, 2025
SAO PAULO (Reuters) -Brazilian airline Gol released a revised five-year strategic plan on Wednesday as it prepares to exit Chapter 11 bankruptcy proceedings, saying the new forecasts would serve as a base for its reorganization.
Gol said in a securities filing it expects to emerge from Chapter 11 in May, and sees its net leverage “substantially improving” going forward as it rebuilds its network and returns to “normal levels” of core earnings by next year.
The carrier, one of Brazil’s largest, filed for Chapter 11 in the United States in early 2024 as it grappled with high debts, hit by a fall in traffic due to the COVID pandemic and Boeing delivery delays.
“We have secured lessor concessions, addressed maintenance and past-due liabilities, launched a profit improvement plan, and reached agreements with key stakeholders,” Gol’s Chief Executive Celso Ferrer said in a statement.
“When implemented through the reorganization plan, they will deleverage Gol’s balance sheet.”
The five-year plan assumes the successful completion of a planned $330 million capital raise as part of the Chapter 11 exit as well as $1.54 billion of exit debt, Gol said. It expects a “significant dilution” of its existing shares.
Gol estimated its net leverage as measured by net debt/EBITDA ratio at 6.1 when it emerges from Chapter 11, but said that it should quickly trend down to 2.7 by the end of 2027 and 1.9 by the end of 2029.
As part of the five-year plan, Gol projected its fleet to reach 167 aircraft by 2029, up from 137 this year. The Brazilian carrier flies only Boeing 737 jets and has been renewing its fleet as it takes delivery of newer 737 MAX aircraft.
Gol has some 30% of domestic market share, dominating Brazil’s airline industry along with Azul and the local unit of Chile-based LATAM Airlines.
(Reporting by Gabriel Araujo. Editing by Bernadette Baum, Mark Potter and Christina Fincher)
