MIAMI – Brazilian airline GOL (G3) has increased the premium by 47.9% offered to shareholders of its frequent flyer program SMILES.
According to a report by aviation portal Aviator published on March 24, as part of the airline’s restructuring process, the “proposal offers SMILES’ shareholders a meaningful increase in premium to the unaffected price on December 7, 2020.”
The shareholder meeting, scheduled to take place on March 24, will deliberate about the increase.
Proposal Allows GOL to Provide a ‘Higher Cash Component’
“Accordingly, should the Reorganization be approved in the extraordinary general meetings of GOL and SMILES, both to be held on March 24, 2021, shareholders of SMILES will receive, for each common share issued by SMILES that they own:
- An amount in Brazilian currency of R$8.28, adjusted as provided in the Protocol and Justification; and (b) 0.660 preferred shares issued by GOL, adjusted as provided for in the Protocol and Justification (“Base Exchange Ratio”); or
- (a) an amount in Brazilian currency of R$21.68, adjusted as provided for in the Protocol and Justification; and (b) 0.165 preferred shares issued by GOL, at the discretion of the SMILES shareholders that, in the latter case, must exercise the option as described in Section 3 of the Protocol and Justification (“Optional Exchange Ratio”),” the report stated, quoting filings for the Brazilian authorities.
The proposal allows G3 to better serve shareholders’ interests.
“The revised Reorganization proposal allows GOL to more efficiently match the consideration preferences of disparate types of investors and provides a higher cash component while maintaining upside participation through the Base Exchange Ratio,” the report said.
GOL stated in the documents that the proposal “is the result of negotiations with several of SMILES’ largest shareholders,” with a support of 25% of SMILES’ minority shareholders.
Featured image: GOL Linhas Aéreas PR-XMR Boeing 737-8 MAX. Photo: Nick Sheeder/Airways