São Paulo, October 26, 2021 - GOL Linhas Aéreas Inteligentes S.A. (NYSE: GOL and B3: GOLL4), (“GOL” or “Company”), Brazil’s largest airline, announces that it has completed the previously informed refinancing of its short-term bank debt in the amount of R$1.2 billion, via the extension of the 7th Series of Debentures and issuance of the 8th Series of Simple Non-Convertible Debentures (“Debentures”) by GLA Linhas Aéreas S.A. (“GLA”), an operating unit of the Company. The transaction was led by a syndicate of banks comprised of UBS BB S.A., Bradesco BBI S.A. and Santander S.A. (“Banks”) in accordance with CVM Instruction 476.
“Completing the refinancing of R$1.2 billion of short-term debt, and the subsequent conclusion of our liability management program, could not have come at a better time,” stated Richard Lark, CFO. “Our balance sheet is now in a stronger position in terms of its outstanding debts, versus our peers, which we view to be a competitive advantage in the current market environment.”
As noted by the Company on the announcement of the terms and conditions for the refinancing in September 2021, the issuance of these Debentures concludes GOL’s liability management program and returns the Company to its lowest level of short-term bank debt since 2014, with approximately R$0.5 billion. The value extraction from GOL’s assets contributed to a reduction of R$3.3 billion of its short-term financial debt in the 19-month period ended in September 2021. The Company’s lease liability remained at approximately 46% of total indebtedness during the same period, with a stable IFRS16 discount rate.
The proceeds from the Debentures will be used in full to refinance the Company’s short-term debt and extend the average tenor of its liabilities to 3.3 years, an increase of more than two years. This includes R$0.6 billion remaining balance of the 7th issue of debentures, and approximately R$0.6 billion of export financing lines (Finimps) and working capital credit lines. The transaction will also improve GOL’s credit metrics, by better matching future assets and liabilities and reducing the Company’s average cost of debt. The next material maturity date for GOL’s outstanding debts is not until July/2024.
The Debentures will be remunerated at a rate of CDI+4.5% (an over 20% reduction in spread over CDI) and will mature within three years after issuance. Payments of principal and interest will be monthly, after a grace period of 12 months for principal and six months for interest. The Debentures are redeemable, in whole or in part, at any time after issuance. They are guaranteed by GOL and have a fiduciary guarantee from GLA in the form ofa statutory lien on certain credit card receivables, while preserving the rights to factor the receivables from these guarantees.
GOL’s disciplined financial management throughout the pandemic strengthened its balance sheet and reduced short-term indebtedness, preserving liquidity to maintain operations. The Company also concluded several other important initiatives to rebalance its capital structure, such as the amortization of its US$300 million Term Loan B; the issuance of US$650 million of Senior Secured Notes due 2026; a R$423 million equity capital increase led by its controlling shareholder; and the R$1.3 billion acquisition of the minority interest in its Smiles loyalty program.
The table below shows the sources and uses in GOL’s liability management since January 2020.
Sources of Funds
R$bn Debt Amortizations R$bn
Senior Secured Notes due 2026 Debentures
Term Loan B 1.6
Guaranteed Financing 1.3
Smiles Cash Restricted Cash Aircraft Sales Deposits
0.7 0.6 0.5 0.3 0.2
Import Financing 1.2
Capex Financing 0.8
Working Capital Financing 0.8
Senior Notes due 2022 0.4
GOL is grateful for the continuous support of the Banks coordinating this transaction, which demonstrated their confidence in GOL throughout the pandemic.