Brazil’s Gol Airline deepens Delta ties

Paul Kiernan – The Wall Street Journal, 7/10/2015

Brazilian airline GOL Linhas Aereas Inteligentes SA said Friday it is planning a $146 million capital increase to be divvied up between its controlling shareholder and U.S. carrier Delta Air Lines, deepening an existing partnership.

Brazil’s Constantino family, which owns all of Gol’s voting shares through its investment fund, plans to buy $90 million of newly issued preferred shares in Gol, while Delta will buy $56 million. In addition, Delta will guarantee a term loan of as much as $300 million to Gol from third-party lenders, the Brazilian carrier said.

The agreement is intended to “strengthen the airlines’ strategic alliance and enhance Gol’s financial position and liquidity.” It follows a 2011 deal under which the two airlines reached a code-sharing agreement after Delta invested $100 million for a 3% stake in Gol, gaining a board seat in the process.

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