US court accepts Gol’s request for judicial recovery

Chapter 11

Determination in favor of the airline was made this Friday (26)

GOL Linhas Aéreas obtained a favorable decision to begin the judicial recovery process, called ‘Chapter 11’. The approval was carried out by the Bankruptcy Court of the Southern District of New York and signed by Judge Martin Glenn, this Friday (26). As a result, legal actions will be suspended and the company will be able to continue operations while carrying out financial restructuring.

The decision also determines that creditors cannot obtain assets/property from the company during this period. GOL announced its intention to employ the Chapter 11 mechanism not only to reorganize its short-term financial obligations, but also to strengthen its capital structure, seeking long-term sustainability. The company intends to obtain an inflow of capital, which comprises US$950 million in debtor-in-possession financing.

Currently, Gol is linked to Abra. Financing during the debt recovery process, according to an official statement, was signed by members of the business group who hold bonds, both from the Ad Hoc group and other investors.

“The company will seek access to this financing as part of the first day hearing with the US Court, expected in the coming days. The financing is subject to court approval and, together with cash generated by ongoing operations, will provide substantial liquidity to support operations as normal during the financial restructuring process,”

reported.

Gol’s CEO, Celso Ferrer, also spoke in a statement aimed at the market. He stated that the company’s challenges were a consequence of the COVID-19 pandemic, in addition to emphasizing that the process will allow for reorganization, without affecting the standard of service to passengers.

Chapter 11

The Chapter 11 mechanism has already been used by other airlines, such as Latam, to enable the financial restructuring of companies. Gol’s CEO highlighted that the measure “is not a judicial recovery”, but an alternative to organize the necessary measures to obtain capital, while continuing operations normally.

*With information from Power 360

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