Low-cost Brazilian Airline Gol files for bankruptcy in US

Gol Linhas Aereas Inteligentes SA filed for bankruptcy, capping the Brazilian airline’s ill-fated efforts to bounce back from the Covid-19 pandemic.

The low-cost carrier filed for Chapter 11 bankruptcy protection on Thursday in New York, according to court filings. The move allows Gol to keep operating while it seeks approval of a creditor-repayment plan. 

The Sao Paulo-based company secured $950 million of bankruptcy financing from a group of bondholders, according to a statement.

Gol has grappled with a heavy debt burden and saw investors question its ability to navigate a rebound in the air travel industry across the region. After initially avoiding the fates of pandemic-scarred peers, the firm last year hired Seabury Capital to help review its debt and other financial obligations. 

Abra Group Ltd., a holding firm created to control the operations of Gol and Colombia’s Avianca, has held talks with creditors to discuss a debt overhaul and a plan to raise fresh cash for Gol, Bloomberg reported in January.

Shares in Gol fell as much as 2.3% in Sao Paulo after the filing, while bonds due in 2025 last changed hands at 15 cents on the dollar, trading near what some analysts see as recovery value for the credit. 

The Brazilian airline had a $12 million coupon payment due next week on its bonds maturing in 2025, according to data compiled by Bloomberg.