Gol Linhas Aereas Inteligentes SA (GOLL4), the Brazilian airline cutting flights and jobs to end losses, is seeking to renegotiate terms of 1.1 billion reais in debentures held by Banco Bradesco SA (BBDC4) and Banco do Brasil SA.
The terms on the 2015 debentures must be reworked by the end of the year or the carrier will be out of compliance with covenants and have to pay the debt immediately, Chief Financial Officer Edmar Prado Lopes Neto said. A weaker real and rising fuel costs are hurting results, he said.
Gol is working to return to profit after adjusted losses in five of the past six quarters as Brazil’s economic growth and domestic travel demand slow. The country’s second-biggest airline is firing workers, scaling back its schedule and returning aging jets.
“Operations are weak despite cost reductions,” Lopes Neto said yesterday in a telephone interview from Sao Paulo, where Gol is based. “We will continue to be pressured for some time.”
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