GOL Linhas Aéreas Inteligentes (GOL), Brazil's largest domestic airline, has concluded the term for its equity capital increase announced on April 28, 2021. The capital Increase, which was anchored with a R$268 million investment by the Company's controlling shareholder, the Constantino brothers, has been supported by another R$155 million from GOL's minority shareholders. GOL has raised a total of R$423 million, which is in line with expectations.
Together with the R$607 million capital increase related to the take-in of the Smiles minority interest, GOL has issued approximately R$1 billion of new equity capital this month, making GOL the only South American airline to increase its equity capital over the past 12 months. GOL’s controlling shareholder maintains a 57% economic stake in the equity of the company. Also, these equity issuances make GOL the most liquid airline stock in Latin America with an average daily trading volume of approximately R$300 million.
When combined with the recent re-tap on the company's secured notes issuance, GOL has raised over R$2.7 billion of long-term capital this quarter.
"Our success in maintaining liquidity through this pandemic is the result of concerted efforts to right-size our balance sheet over the past five years," said Paulo Kakinoff, CEO. "By minimizing dilution over the past 12 months and executing on two key strategic transactions, we are positioned for meaningful earnings growth as the increase in immunity and beginning of the high season drives a growth in demand for air travel in Brazil."
Since the beginning of 2020, GOL has generated over R$6 billion of liquidity through its working capital management while reducing its net debt by R$2 billion. At the same time, GOL completed two earnings-accretive and credit-positive strategic transactions, including the re-integration of its loyalty program Smiles and signing the purchase agreement for MAP Airlines, which provides for growth in the Company's regional network from São Paulo and Manaus.
Richard Lark, CFO added: "All of the transactions and initiatives that we have initiated or implemented throughout the pandemic have been focused on two primary objectives: (i) ensuring that we keep within compliance of our strict financial policy; and (ii) emerging from the pandemic with our existing cost-advantage over competitors.