GOL Noteholder Group Disputes Company's Positions On Proposed Exchange Offer

NEW YORK, May 13, 2016 /PRNewswire/ -- On April 26, 2016, an ad hoc group ("Noteholder Group") of holders of unsecured notes (the "Notes") issued by GOL Finance Inc., GOL LuxCo S.A. and VRG Linhas Aereas S.A. and guaranteed by GOL Linhas Aereas Inteligentes S.A. (collectively, "GOL") and certain Notes additionally guaranteed by VRG was formed.  The Noteholder Group is made up of over a dozen sophisticated financial institutions with vast experience in Latin America and holds approximately 25% of all outstanding Notes and more than 50% of the Notes due 2022 (which have an aggregate principal amount of US$325 million).  As previously announced, the Noteholder Group rejects the proposed exchange offer for the Notes launched by GOL on May 3, 2016 (the "Proposed Exchange Offer") and strongly urges other holders of the Notes ("Noteholders") to reject it as well. 

Since launching the Proposed Exchange Offer, GOL has refused to enter into a dialogue with the Noteholder Group; however, during that same time, GOL has publicly stated that the Proposed Exchange Offer is "not negotiable" and professed to know Noteholders' restructuring preferences.  An unwillingness to involve Noteholders in their global restructuring process appears to be the centerpiece of GOL's restructuring strategy to pressure Noteholders into accepting material losses on their Notes, while other similarly situated creditors of GOL (including Brazilian lenders) stand to receive little to no impairment of their recoveries.

Disappointingly, GOL ignores the many inconsistencies in its Proposed Exchange Offer and has thus far simply abandoned any cooperative process with the Noteholders.  Notably, the Notes rank pari passu with each other and are entitled to the same treatment as all other unsecured debt of GOL, yet GOL provides discriminatory treatment of certain Notes and treats the unsecured debt of GOL held by other creditors more favorably than the Notes.  Indeed, the substantially lower recoveries for a majority of the Notes under the Proposed Exchange Offer seek to elevate the rights and interests of local creditors over international creditors and appear arbitrarily tied to the secondary market price of the Notes.   Such discriminatory treatment of similarly situated unsecured creditors may constitute avoidable preference transfers under applicable law and may lead to potential clawback litigation, an important consideration that GOL has not addressed with its Noteholders.   

Even though GOL has acknowledged that there is substantial mutual dependency between the future success of GOL and concessions from its various stakeholders, GOL has inexplicably chosen to shut Noteholders out of their restructuring discussions and embark on a unilateral strategy to dramatically reduce by up to 70% the principal amount of the Notes.  The Noteholder Group has been shown no evidence or justification for such treatment of the Notes and has been provided no real details regarding the status or proposed terms and conditions of restructuring discussions with other creditor groups.   Based on the foregoing, the Noteholder Group urges all Noteholders to reject the Proposed Exchange Offer. 

Despite the Noteholder Group's disappointment in GOL's refusal to engage in meaningful discussions, the Noteholder Group continues to be ready and willing to engage in negotiations with GOL.  In the absence of any engagement by GOL, the Noteholder Group expects GOL to honor its obligations with respect to the outstanding Notes.  Holders of the Notes are encouraged to contact the Noteholder Group through its advisors White & Case LLP, Houlihan Lokey, Metrica Investimentos, and Pinheiro Guimarães - Advogados.  Contact details are as follows:

SOURCE White & Case LLP