Strategic Transactions in Action - Report on Gol Linhas Aereas Inteligentes S.A.

Jul 20, 2015, 09:25 ET from

NEW YORK, July 20, 2015 /PRNewswire/ --

ACI Association has initiated research coverage on Gol Linhas Aereas Inteligentes S.A. (NYSE: GOL). Select highlights from the internally released reports are being made available to the general public (included below), with access to the entirety of the research available to new members.

Today, membership is open to readers on a complementary basis at the following URL:

Highlights from our GOL Report include:

  • Recent Strategic transactions - On July 10, 2015, GOL Linhas Aéreas Inteligentes S.A. reported that its controlling shareholder Fundo de Investimento em Participações Volluto ("Volluto") and Delta Air Lines, Inc. have agreed to make a joint equity investment in GOL of up to $146 million.
  • Strategic Intent - The release highlighted that Volluto has agreed for the equity investment $90 million in order to exercise its preemptive rights to own c. 61% of the new shares of GOL in the capital increase, and also to allocate Delta its preemptive rights to subscribe for any remaining shares, after all other shareholders have exercised their preemptive rights. Further, for an aggregate investment of up to US$56 million Delta agreed to exercise its preemptive rights to hold c. 2.9% of the new shares in the capital increase, and to exercise the preemptive rights assigned to it by Volluto to subscribe for additional shares remaining after the exercise of preemptive rights by all other shareholders. Moreover, all preferential shareholders of GOL, except for holders of preferred shares in the form of ADRs, will be allowed to exercise their preemptive rights to subscribe for a portion of the newly issued shares equivalent to their existing shareholdings, pursuant to the by-laws of GOL.
  • GOL Term Loan Guaranteed by Delta - Under an agreement between Volluto and Delta, the latter has also agreed to guarantee a term loan to be entered into by GOL with third party lenders of up to $300 million. GOL will also provide a security interest in common shares of Smiles S.A. to Delta to secure any payments made by Delta on behalf of GOL. The Delta guarantee, to be arranged by Morgan Stanley Senior Funding, Inc., will be subject to certain conditions including the negotiation of definitive documentation.
  • Extension of Commercial Arrangements with Delta - GOL and Delta have also agreed to further increase the duration of their existing strategic, long-term commercial cooperation agreements with exclusive options intended to strengthen the cooperation and synergies between both the companies, and also to extend their commercial arrangements related to aircraft maintenance services.
  • Boosting financial strength - The above-mentioned strategic transactions are aimed to further strengthen the strategic partnership of GOL and Delta and to substantially enhance the financial position and liquidity of GOL. Further, the consummation of each of the strategic transactions is subject to conditions, including the execution and delivery of definitive documentation, regulatory approvals from the Brazilian antitrust authority, and other customary closing conditions.

To find out how this influences our rating on Gol Linhas Aereas Inteligentes S.A., read the full report in its entirely here:

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