GOL Linhas Aéreas Inteligentes S.A. and its affiliated debtors have filed a comprehensive disclosure statement with the United States Bankruptcy Court for the Southern District of New York, presenting a detailed roadmap for the Brazilian airline's emergence from Chapter 11 bankruptcy through a significant deleveraging of its balance sheet and substantial new capital investment.
The 179-page disclosure statement, filed on March 11, 2025, in case number 24-10118 (MG), outlines the Third Amended Joint Chapter 11 Plan of Reorganization developed by GOL's restructuring committee after months of complex negotiations with key stakeholders. Milbank LLP is serving as lead bankruptcy counsel for the debtors, with Hughes Hubbard & Reed LLP acting as co-counsel.
Significant Debt Reduction and New Capital
The restructuring plan aims to eliminate approximately $1.7 billion of prepetition funded debt and up to $850 million of other obligations. According to the disclosure statement, the Debtors intend to raise up to $1.9 billion in new capital through exit notes to repay the company's debtor-in-possession (DIP) facility and incremental new money financing to support post-emergence operations.
"The transactions contemplated in the Plan will strengthen the Company by substantially reducing its debt, increasing its cash flow, and enhancing operations for future growth," the disclosure statement notes.
Abra's Central Role in Restructuring
Abra Group Limited, GOL's largest secured creditor and majority economic interest holder, has agreed to convert a significant portion of its approximately $2.8 billion in claims into new equity and take-back debt. Specifically, Abra will receive:
- New equity valued at approximately $950-$1,050 million, representing approximately 76-81% of the reorganized company's equity upon emergence
- $850 million in take-back debt, of which $250 million will be mandatorily exchangeable into additional equity if certain valuation metrics are achieved
- If the mandatory exchange occurs, Abra would hold approximately $1.2-$1.3 billion in new equity, representing approximately 80-84% of the company
The agreement with Abra was reached after extensive investigations by both the restructuring committee and the Official Committee of Unsecured Creditors into the March 2023 Abra Transaction, which had been scrutinized for potential avoidance claims and other causes of action.
Recoveries for Other Creditors
The plan provides for various classes of claims with different estimated recovery rates:
- Senior secured 2028 Notes Claims: approximately 65% recovery
- 2026 Senior Secured Notes Claims: approximately 40% recovery
- General Unsecured Claims: varying recoveries based on debtor entity, with GLA General Unsecured Claims receiving 8.1-11.0% and GLAI General Unsecured Claims receiving 0.9-1.2%
- General Unsecured Convenience Class Claims: approximately 15% recovery
Unsecured creditors collectively will receive new equity valued at up to approximately $235 million, with potentially more depending on the resolution of certain contingencies outlined in the plan.
Corporate Structure Changes
The reorganized company will operate under a new parent entity, currently expected to be organized under Luxembourg law with a Brazilian intermediate holding company. This structure was selected for tax efficiency and to facilitate potential future dividend payments and capital gains exemptions.
"The New Equity will be held through DTC. Transfers of the New Equity outside of DTC will be subject to restrictions on transfers to the extent such transfer would subject the Reorganized Debtors or Abra to the registration and reporting requirements of the Securities Act and the Securities Exchange Act," the disclosure statement explains.
Fleet Restructuring Achievements
During the Chapter 11 process, GOL has successfully restructured its fleet obligations, reaching court-approved agreements with substantially all aircraft and engine lessors. These agreements have:
- Reduced obligations by approximately $700 million
- Mitigated end-of-lease obligations
- Addressed prepetition arrears, deferrals, and rent obligations
- Secured $375 million in new capital from lessors for engine maintenance and financing new deliveries
As of the filing date, GOL had successfully negotiated the addition of multiple new aircraft to its fleet through sale and leaseback arrangements with various lessors.
Brazilian Tax Settlement
The disclosure statement also highlights a significant achievement in resolving GOL's tax liabilities. In December 2024, the bankruptcy court approved a settlement agreement between the debtors and Brazilian government parties that reduced GOL's tax and other obligations from an alleged $1.1 billion to approximately $250 million. This settlement will generate approximately $184 million of liquidity for the debtors through 2029.
Potential Business Combination with Azul
In a notable development that could affect the company's post-emergence landscape, the disclosure statement reveals that on January 15, 2025, Abra Group Limited and Azul S.A. signed a non-binding Memorandum of Understanding to explore a potential business combination involving the reorganized GOL and Azul, though GOL itself is not a party to this agreement.
Path Forward
The debtors have already secured multiple extensions to their DIP facility, which is currently set to mature on June 8, 2025, with the possibility of extension to July 29, 2025. Key upcoming milestones include bankruptcy court approval of the disclosure statement by April 7, 2025, and confirmation of the plan by May 26, 2025.
Chief United States Bankruptcy Judge Martin Glenn will preside over the confirmation hearing. The disclosure statement indicates that both the debtors and the Official Committee of Unsecured Creditors support the plan and urge all eligible parties to vote in favor of it.
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a 179 page court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.
Disclosure Statement for Third Amended Joint Chapter 11 Plan