RIO DE JANEIRO — On October 13, Gol Linhas Aéreas (G3) announced in a press release that it plans to merge with its investment group, Gol Investment Brasil S.A. The merger enables the corporation to withdraw from the Brazilian Stock Exchange (B3) and withdraw from the market’s Level 2 of Corporate Governance.
By merging with its investment group, G3 can limit the number of minority shareholders that own the airline’s stock. This move will reduce conflicts with the shareholders as the merger makes financial decisions in the future. Currently, the airline has a free float of about 0.78%, which is far lower than Brazil’s Level 2 of Corporate Governance’s minimum percentage.
In G3’s press release, they listed six goals they aim to achieve as a result of the merger:
- Optimize operational efficiency by simplifying fiscal responsibilities such as taxes, accounting, and intercompany transactions
- Enhance cash management by lowering carrying costs
- Strengthen the company’s financial standing by having a more unified and efficient management of equity
- Enhance corporate governance by unifying multiple corporations into one
- Utilization of tax synergies among the various corporations
- Eliminate the need to comply with the Minimum Percentage of Outstanding Shares and the Minimum Quotation of Preferred Shares.
Abra Group Stake
This move follows after the holding company Abra Group, established in 2022, drastically increased its stake in G3 after it filed for Chapter 11 Bankruptcy. Abra now owns more than 80% of G3, adding on to its control of Avianca (AV), Colombia’s largest carrier.
In September, Abra announced that merger talks between G3 and Azul Linhas Aéreas Brasileiras (AD) ended, as well as their codeshare agreement. This merger occurred less than three weeks after the failed AD merger.
However, this merger has yet to be completed. On November 4, G3 will hold a shareholders’ meeting to determine the fate of the merger. The privatization of this merger, as the airline is now operated under Abra Group, will give investors an option to exit the partnership or have a stake in the merger.
Taking control of G3’s merger will bring Abra Group one step closer to filing an initial public offering (IPO).
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