By Dietrich Knauth
NEW YORK (Reuters) – Bankrupt Brazilian airline Gol received U.S. court approval on Wednesday for a $1 billion loan, after resolving the concerns of a group of lenders that feared they would be sidelined by the new loan.
Gol had previously proposed borrowing $950 million in bankruptcy, but it allowed the objecting lenders to kick in an additional $50 million on the new loan and receive interest on that new debt, Gol’s attorney Justin Cunningham said at a hearing in Manhattan.
U.S. Bankruptcy Judge Martin Glenn approved the loan at the hearing in Manhattan, saying he was pleased to see a compromise.
“It’s nice when more people want to put money in,” Glenn said.
The previously objecting lenders, a group of investment funds that had loaned money to Gol in 2020, will not receive the same level of fees as the original group of lenders, who could receive up to $47.5 million in additional commitment fees and backstop fees under the loan agreement, according to court documents. Gol instead agreed to pay them $800,000 for attorneys’ fees and costs related to the renegotiation of the loan.
Gol filed for Chapter 11 bankruptcy protection in the United States on Jan. 25. The airline had been suffering from long-term impacts of the COVID-19 pandemic on travel and has had difficulty sourcing sufficient Boeing 737 Max aircraft to meet a surge in post-pandemic demand for air travel, according to court documents.
Glenn previously approved a portion of the loan, allowing Gol to borrow up to $350 million at a court hearing in January.
(Reporting by Dietrich Knauth in New York, Editing by Alexia Garamfalvi and Jonathan Oatis)
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