Delta Airlines will expand its alliance with Brazil’s Gol under a USD$446 million stock and loan agreement, Gol said. Under the accord, Gol Linhas Aereas Intelligentes’ controlling shareholder, Brazilian investment fund FIP Volluto, will buy up to USD$90 million and Delta up to USD$56 million of new Gol preferred stock.
Delta will also guarantee third-party loans to Gol of up to USD$300 million, the statement said. Gol plans to borrow the money this year, depending on market conditions, Edmar Lopes Neto, the company’s chief financial officer, told investors. The loan will have a counter-guarantee of shares in Smiles, Gol’s frequent-flyer plan, Golsaid.
“It’s always important to bolster the company’s liquidity,” Lopes Neto said. “It’s not a short-term question because if we look at our debt profile, there is no growing cash need in the short term, and by short-term I mean 12 months.”
According to the most recent number released by Gol, the Brazilian airline has a cash position of BRR2.4 billion reais (USD$1.1 billion).
Since 2012, Gol has sold stakes to Delta and Air France-KLM as it raised funds to add foreign routes and invest in a turnaround strategy after years of heavy losses. Gol preferred shares have fallen more than 20 percent in the last two weeks and are down more than 50 percent this yea.