The board of GOL Linhas Aéreas Inteligentes (G3, São Paulo Congonhas) will ask shareholders to approve a capital increase of BRL5.34 billion to BRL19.25 billion reais (USD940 million to USD3.4 billion) by issuing at least 3.64 trillion common shares and 430.3 billion preferred shares and, at most, 13.1 trillion common shares and 1.55 trillion preferred shares, as part of its plans to exit Chapter 11 restructuring.
Following the announcement, GOL's stock dropped 40% on the Bolso do Brasil Stock Exchange to its lowest level since the airline went public years ago. At the time of writing, the share price has recovered somewhat but remains more than 30% down compared to mid-April.
GOL filed for bankruptcy protection in the United States in early 2024 after encountering difficulties around heavy debts and delayed aircraft deliveries. Following that, GOL and its creditors, including its largest creditor, Abra Group Limited, along with other stakeholders, agreed to generate a restructuring plan that would, among other outcomes, convert part of GOL's debts into equity.
The capital increase remains subject to approval from shareholders and the bankruptcy court. Existing shareholders, whose stock will dilute due to the capital raise, will vote on the proposal at a May 30 meeting. The board argues the capital raise is a critical part of GOL's financial restructuring and will put it in a stronger long-term financial position.
Coinciding with the capital increase announcement, GOL has reached an agreement with its last major creditor, Whitebox Advisors, to support its restructuring plan. GOL says that under the agreement Whitebox “guarantees the support of its last main economic stakeholder and provides the company with a clear path to the confirmation hearing of the fully consensual recovery plan."
GOL Linhas Aéreas Inteligentes hopes to exit Chapter 11 in June.
