Brazil airline Gol’s parent company meets creditors for new funds, restructuring

The parent company of Brazil’s Gol Linhas Aereas Inteligentes SA and Colombia’s Avianca is meeting creditors to kickstart negotiations in a bid to fix its balance sheet. 

Abra Group Ltd will host talks with representatives of its $1.5 billion bondholders in New York on Wednesday, the first step toward striking a comprehensive restructuring deal for the troubled low-cost airline group, according to people familiar with the matter, who asked not to be identified because the talks are private. 

Abra’s bondholders are working with financial adviser Houlihan Lokey Inc. and law firm Dechert LLP, while Abra hired Rothschild & Co., they said. The funds in attendance will be barred from trading as they discuss a debt overhaul and a plan to raise fresh cash for Gol, some of the people said.

An official for Houlihan Lokey declined to comment on the negotiations. Representatives for Abra, Gol, Dechert and Rothschild didn’t respond to a request for comment. 

Gol and Avianca’s top shareholders agreed to form Abra about two years ago after the Colombian carrier exited bankruptcy. The airlines continue to operate independently. 

Gol has already gone through several rounds of restructuring and capital raising since the onset of the pandemic. The company must also strike a deal with its own creditors while seeking to renegotiate agreements with lessors. On top of high costs and a heavy debt burden, it has grappled to cash in on the rebound of Brazil flights due to a delay in Boeing Co. deliveries of 737 Max aircraft last year. 

Gol previously said it’s working with adviser Seabury Capital, while some of its bondholders are working with law firm Hogan Lovells, the people said. A spokesperson for Hogan Lovells didn’t respond to a request for comment. 

Gol’s bonds due 2026 are indicated at about 35 cents on the dollar, while Abra’s bonds due 2028 are indicated at 73 cents, according to data compiled by Bloomberg.