S&P cuts Gol Linhas Aereas Inteligentes

S&P said it lowered its ratings on Gol Linhas Aereas Inteligentes SA to CCC- from CCC+ and its senior unsecured notes to CC from CCC. The 5 recovery rating on notes indicating average (20%; rounded estimate) recovery prospects in default is unchanged.

On Saturday, Gol reported it hired Seabury Capital to help it review its capital structure, which could include reprofiling its fleet liabilities and other financial obligations, the agency said.

Earlier this year, Gol completed a debt restructuring on its 2024, 2025, 2026, and perpetual notes.

“We estimate Gol will report EBITDA of about R$4.7 billion in 2023 and $R5.2 billion in 2025, up from $R2.1 billion in 2022. This will result in a drop in S&P-adjusted leverage to 5.2x-5.5x in 2023 and 2024 from 10.3x in 2022. However, substantial lease payments of about $R2.5 billion, high capital expenditures (capex) of about R$2 billion annually, and some working capital outflows would deplete operating cash flow and expose the company to persistent refinancing needs in next two years,” S&P said in a press release.

The outlook is negative.

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