UPDATE 3-Heavily indebted Brazilian airline Gol files for bankruptcy in US
(Adds debt amount in paragraphs 1-2, CEO quotes in paragraphs 4-5 and 16, share movement and analyst comment in paragraphs 6-7 and 9, context in paragraph 8)
By Gabriel Araujo
SAO PAULO, Jan 25 (Reuters) - Brazilian airline Gol on Thursday said it is filing for Chapter 11 bankruptcy protection in the United States, the latest in a series of debt restructurings for a carrier hit by a fall in traffic due to COVID and delays in Boeing deliveries.
Gol, which ended the third quarter with about 20 billion reais ($4.07 billion) gross debt, said it would receive $950 million in financing from bondholders in its holding Abra Group.
The Chapter 11 filing makes Gol the latest Latin American carrier to seek bankruptcy protection after the COVID pandemic, following the path of sister company Avianca, Mexico's Aeromexico and Chile-based LATAM Airlines.
CEO Celso Ferrer told reporters the decision is a step toward ensuring the company has the correct capital structure to face the challenges of the aviation industry and address the economic impacts caused by the pandemic.
"The major goal is to deleverage the company," Ferrer said, adding there are no plans to reduce the airline's operations.
Gol's Sao Paulo-listed shares closed down 3.2% to 6.44 reais each. Local rival Azul jumped 6%.
"Gol's Chapter 11 filing does not come as a total surprise, as it had seemed challenging for the carrier to reach some sort of consensus with its aircraft lessors and other creditors," Citi analysts wrote.
Media reports earlier this month said Gol was considering the move, while the company had maintained it sought a "consensual" restructuring in discussion with creditors.
Gol's shares are down more than 15% since the initial report came out.
LATAM CARRIERS STRUGGLE
Sell-side analysts and rating agencies say Gol has strong operating figures amid healthy demand for air travel in Brazil, but that high leasing and interest expenses had been pressuring its cash flow and adversely affecting its debt profile.
The company has also faced capacity issues with delayed aircraft deliveries from Boeing, which Gol's chief executive said prevented it from growing at the pace it would like to, and maintenance pressure due to engine supply issues.
The firm, which had concluded earlier debt restructuring last year and in 2021, joined several Latin American carriers in filing for bankruptcy protection since the COVID pandemic disrupted air travel in 2020.
Colombia's Avianca - which is part of the same holding as Gol, though it operates independently - completed its restructuring process at the end of 2021.
Peer LATAM Airlines came out of bankruptcy proceedings with an $8 billion reorganization plan in 2022, the same year Aeromexico completed an almost-two-year-long Chapter 11 process.
"In our case, it's difficult to say precisely how much time it could last, but we expect it will last substantially less than those other bankruptcy processes," Ferrer said.
($1 = 4.9165 reais) (Reporting by Andre Romani and Gabriel Araujo; Editing by Kylie Madry, Bill Berkrot and Michael Perry)