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Delta To Purchase $56 Million In Additional
Shares In GOL Airlines |
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July 13, 2015 - Delta will deepen its existing
partnership with GOL Airlines (Linhas Aereas
Inteligentes) to enhance the Latin American
carrier’s financial position and liquidity. GOL
Airlines is the second largest airline in
Brazil, after
TAM.
Under the agreement, GOL’s controlling
shareholder will invest up to $90 million in
newly issued preferred shares of GOL, and Delta
will invest up to $56 million in newly issued
preferred shares of GOL. Delta will also
guarantee third-party loans to GOL of up to $300
million.
“GOL plans to borrow the money this year,
depending on market conditions, and feels it’s
important to bolster the company’s liquidity,”
said Edmar Lopes Neto, Chiel Financial Officer
of GOL.
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Since 2012, GOL has raised funds to add foreign
routes and invest in a turnaround strategy after
years of loss. According to the most recent
number released by GOL, the airline has a cash
position of $1.1 billion. Delta and GOL
also agreed to extend the terms of their
strategic and commercial operating agreements.
The stock and loan transactions are subject to
the execution and delivery of proper
documentation and customary closing conditions,
including required regulatory approvals.
Back in 2006, GOl Airlines suffered a major loss
when a Boeing 737-8EH, registration PR-GTD,
Flight 1907, had departed
Manaus,
Brazil for
Rio de Janeiro when collided in
midair with an Embraer Legacy 600 business jet
over
Mato Grosso,
Brazil. All 154
passengers and crew aboard the Boeing 737 died
when the aircraft broke up in midair and crashed
into an area of dense jungle, while the Embraer
Legacy, despite sustaining serious damage to its
left wing and tail, landed safely with its seven
occupants uninjured.
Because of this accident the Jet Airliner Crash
Data Evaluation Centre (JACDEC) rated the
company, as the fourth worst safety record in
the world. This evaluation is based on number of
number of casualties. It should be noted that
since GOL Airlines is a relatively young airline
with only one hull loss. |
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