/raid1/www/Hosts/bankrupt/TCRLA_Public/241115.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Friday, November 15, 2024, Vol. 25, No. 230
Headlines
A R G E N T I N A
MSU ENERGY: Fitch Affirms 'CCC-' LongTerm IDRs
YPF SA: In Talks for Equity Partners in LNG Plant
B A H A M A S
FTX GROUP: Lenient Sentence Sought for Former Tech Chief
FTX GROUP: U.S. Go After Assets Used for Alleged China Bribes
B O L I V I A
BOLIVIA: Reversal of Gold Reserves Reporting Highlights Woes
B R A Z I L
BRAZIL: Finance Minister Says Fiscal Measures to Be Announced
GOL LINHAS: Reaches US$950M Debt-to-Equity Deal With Abra Group
C H I L E
WOM SA: Gets $500M Stalking Horse Proposal for Restructuring Plan
C O L O M B I A
COLOMBIA: Central Bank Cuts Key Rate to 9.75%
X X X X X X X X
LATAM: Inflation Jumps in Brazil, Chile
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A R G E N T I N A
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MSU ENERGY: Fitch Affirms 'CCC-' LongTerm IDRs
----------------------------------------------
Fitch Ratings has affirmed MSU Energy S.A.'s (MSU Energy) Long-Term
Foreign Currency and Local Currency Issuer Default Ratings (IDRs)
at 'CCC-', and affirmed the USD600 million senior secured notes due
February 2025 at 'CCC'/'RR3'. Fitch has also assigned 'CCC'/'RR3'
to MSU Energy's proposed secured notes up to USD400 million. Net
proceeds from the planned issuance will repay outstanding debt.
Proposed notes will be secured by equipment and combined cycle
power purchase agreements (PPAs).
MSU Energy ratings reflect the ongoing refinancing process. MSU
Energy announced on November 8 a package to refinance the
outstanding 6.875% secure notes due 2025 for USD600 million
comprising of USD220 million syndicate loan and a tender offer to
issue up to USD400 million in secured notes. Fitch will continue to
closely monitor the refinancing due to the proximity of the
maturity of the notes. Failure to refinance in a timely fashion
could result in downgrade.
In addition, ratings reflect the exposure to Compañía
Administradora del Mercado Mayorista Eléctrico (CAMMESA). CAMMESA
is responsible for managing wholesale electricity market
transactions in Argentina. It relies on government subsidies to
cover the cost of the electricity generated, which creates
additional risk for MSU's operations since a significant portion of
its revenue depends on receiving payments from CAMMESA.
Key Rating Drivers
Refinancing in Process: In 2024, MSU Energy successfully paid its
USD250 million secured notes with the final amortization payment in
February 2024, and during November 2024, USD45.5 million was paid
with the company´s internal cash flow generation.
In addition, MSU Energy announced on November 8 a package to
refinance the outstanding 6.875% secure notes due 2025 for USD600
million comprising of USD220 million syndicate loan and a tender
offer to issue up to USD400 million in secured notes. Proposed new
notes will be secured by equipment and Combined-Cycle PPAs from MSU
complex. Fitch will continue to closely monitor the refinancing due
to the proximity of the maturity of the notes. Failure to refinance
in a timely fashion could result in downgrade.
Stable Cash Flow Profile: Fitch anticipates an EBITDA generation of
more than USD160 million during 2024-2027, with EBITDA margins
above 80%. MSU Energy successfully completed all its projects, in
2020, eliminating construction risk, and reaching roughly a 99%
availability factor for its plants.
During 2024, all revenues derive from U.S. dollar denominated
long-term PPAs with CAMMESA for the open cycles, reaching 450MW of
installed capacity due in 2027/28 and from 15-year PPA for another
combined cycle reaching 300MW due in 2035. With a total installed
capacity of 750MW, almost 92% of MSU revenues comes from fixed
capacity payments and the remaining portion derives from variable
payments.
Heightened Counterparty Exposure: MSU Energy relies on payments
from CAMMESA, which represents electricity generators,
transmission, distribution and large consumers or wholesale market
participants known as Mercado Mayorista Electrico. CAMMESA pays
invoices in about 48 days, close to the 42-day contracted payment
period. Fitch expects timely payments to continue as tariffs for
final consumers were adjusted in 2024 and distribution companies
settle pending accounts with CAMMESA. Prolonged payment delays
would be financially challenging for the company.
Gradual Deleveraging Trajectory: In the event of successful
refinancing, Fitch estimates MSU Energy's total debt/EBITDA for
2024 will decline to 4.2x from 4.9x in 2023 after the fourth full
year of operation of its combined cycle expansions. Leverage is
forecast to decline thereafter to below 4.0x by 2026. Leverage is
expected to slightly increase in 2027 due to the expiration of
Resolution 21 PPAs. Fitch expects 2024 EBITDA interest coverage to
average around 2.0x over the rating horizon.
Derivation Summary
MSU Energy's rated Argentine utility peers are AES Argentina
Generacion S.A. (CCC-), Generacion Mediterranea S.A. (GEMSA; CCC-),
Pampa Energia S.A. (B-/Stable) and Genneia S.A. (CCC-). MSU
Energy's ratings and those of its pure-play generation peers
reflect high counterparty exposure given CAMMESA's dependence on
government subsidies for payment. Pampa also has Oil & Gas revenues
which diversifies itself from CAMMESA. MSU Energy's successful
completion of its three combined-cycle expansions in 2020 under
Resolution 287 provide a significant boost to the company's cash
flow generation.
MSU Energy's expected 2025 gross leverage, measured as gross
debt/EBITDA, is 4.1x, weaker than Pampa Energia's 1.2x, AES
Argentina's 1.0x, Genneia's 2.8x and lower than GEMSA's U.S.
dollar-based leverage of 4.6x. Fitch expects MSU Energy to slowly
deleverage as increased cash flow from expansions is used to pay
down amortizing debt. Similar to MSU Energy's completed
combined-cycle expansions in 2020 under Resolution 287, GEMSA has
recently completed a combined-cycle expansion and is expecting
completion for another by the end of 2024, which they incurred debt
of USD130 million in 2021 to fund the project.
Key Assumptions
- 750MW of total installed capacity with 250MW each at the General
Rojo, Barker and Villa Maria power plants;
- Simple-cycle PPAs granted under Resolution No. 21 with a fixed
payment rate (USD/MW-month) of USD20,900 for General Rojo, and
USD19,900 for the Barker, and Villa Maria plants, and a variable
payment rate (USD/MWh) of USD8.50 for natural gas and USD12.50 for
diesel oil;
- Combined-cycle PPAs granted under Resolution 287/2018 with a
fixed payment rate (USD/MW-month) of USD18,900 for General Rojo,
and USD19,900 for the Barker and Villa Maria plants, and variable
payment rates (USD/MWh) of USD10.40, USD8.80, and USD12.70 for
electricity dispatched at the General Rojo, Barker, and Villa Maria
plants, respectively;
- Average projected dispatch rate of 45% in in 2024, 2025 and 48%
dispatch 2026 and beyond;
- Capex of USD10 million in 2024, USD15 million in 2025 and USD2
million for 2026 and on;
- Refinancing of maturing debt at a higher cost of capital;
- No taxes paid through the rating horizon.
Recovery Analysis
Assumptions:
- 30% EBITDA decline during bankruptcy;
- 5.0x EV/EBITDA multiple;
- 10% administrative claims.
Argentina is assigned to Group D, where the assigned Recovery
Ratings (RR) are capped at 'RR4'. Fitch believes the recovery
prospects for MSU Energy is higher than the expected recovery of
31%-50% for the 'RR4' band. This is based on Fitch's bespoke
recovery analysis for each individual issuer as well as precedents
of debt exchange offerings driven by capital control restriction
put into place by the Argentine Central Bank. In all cases, the
calculated recovery was higher than the expected recovery of
51%-70% for the 'RR3' band, but Fitch capped the RRs at 'RR3' to
reflect a less predictable range of outcomes.
Under the Country-Specific Treatment of recovery criteria. Fitch
can assign a recovery rating that is above the cap when Fitch has
reason to believe that recoveries in that individual case will be
consistent with a higher RR. Therefore, the 'RR3' supports a
one-notch uplift for the instrument rating from the issuer's
Foreign Currency IDR, given the CCC- IDR of the company.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An upgrade of the Argentine sovereign rating;
- Given the issuer's high dependence on CAMMESA subsidies from the
national treasury, any further regulatory developments leading to a
market less reliant on support from the Argentine government or a
sovereign upgrade could positively affect the company's
collections/cash flow.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Inability to refinance maturities due in February 2025 and a
default or default-like process has begun;
- A default or a default-like process of the sovereign has begun,
which would be represented by a 'CC' or 'C' rating given that MSU
Energy's ratings are linked to those of the Argentine sovereign due
to the high reliance on government subsidies to the electricity
sector.
Liquidity and Debt Structure
Tight Liquidity: As of September 2024, MSU Energy cash and
equivalents reached USD15 million, including USD10 million that is
restricted to comply with guarantee for the notes due February
2025. The company fulfills its daily working capital needs through
operating cash flow, supplemented by short-term facilities of up to
USD50 million.
MSU Energy's debt structure is predominantly comprised of USD600
million senior secured notes due February 2025.
Issuer Profile
MSU Energy is an Argentine electric power company that currently
has 750MW of electric generating capacity, evenly distributed among
its three power plants: General Rojo, Barker and Villa Maria.
Sources of Information
The original committee decision was subject to an external appeal.
This has resulted in a final rating outcome that is different from
the original committee.
External Appeal Committee Outcomes
In accordance with Fitch's policies the Issuer appealed and
provided additional information to Fitch that resulted in a rating
action that is different than the original rating committee
outcome.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in our
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
MSU Energy S.A. LT IDR CCC- Affirmed CCC-
LC LT IDR CCC- Affirmed CCC-
senior secured LT CCC New Rating RR3
senior secured LT CCC Affirmed RR3 CCC
YPF SA: In Talks for Equity Partners in LNG Plant
--------------------------------------------------
Jonathan Gilbert at Bloomberg News reports that YPF SA is in talks
with global supermajors to become equity partners in its LNG export
project.
"Petronas has to decide at the end of December if to continue or
not," CEO Horacio Marín said on an earnings call, according to
Bloomberg News. "We are continuing to discuss with supermajors to
enter as equity," he added.
The report says Marin has been meeting potential buyers of LNG in
Asia and Europe. Marin disclosed that YPF has reached more than a
dozen agreements with suitors to explore offtake contracts and
plans to have another soon with India for a "big number," Bloomberg
News reports.
Bloomberg notes an exit by Petronas, which started the LNG venture
two years ago, would be a blow since it has expertise in the
provision of floating liquefaction vessels. The report adds YPF is
ramping up production in heralded shale patch Vaca Muerta, where
its capability to invest depends heavily on fuel prices that it
charges at the pump.
Bloomberg News says YPF will have an equity stake of up to 40% in
Vaca Muerta Sur, a US$2.5-billion cross-country oil pipeline
project. YPF is leading drillers' search for funding, and
international banks have signed letters of intent to lend US$1.5
billion, Bloomberg News says, citing Chief Financial Officer
Federico Barroetavena. "We believe that we have strong interest to
finance this deal, but it will be a process that takes some time,"
Barroetavena said, Bloomberg News adds.
About YPF SA
YPF S.A. is a vertically integrated, majority state-owned Argentine
energy company, engaged in oil and gas exploration and production,
and the transportation, refining, and marketing of gas and
petroleum products.
Founded in 1922, YPF was an oil company established as a state
enterprise. YPF was later privatized under president Carlos Menem
and was bought by the Spanish firm Repsol in 1999, and the
resulting merged company was call Repsol YPF.
In 2012, about 51% of the firm was renationalized and this was
initiated by President Cristina Fernandez se Kirchner. The
government of Argentina agreed to pay $5 billion compensation to
Repsol.
As reported in the Troubled Company Reporter-Latin America on Sept.
3, 2024, S&P Global Ratings assigned its 'CCC' issue-level rating
to YPF S.A.'s (CCC/Stable/--) proposed senior unsecured notes due
2031. YPF will use the proceeds to tender up to $500 million of
its outstanding 8.5% senior unsecured notes due July 2025 and its
6.95% July 2027 notes, and for other general corporate purposes.
With this transaction, the company would start refinancing its 2025
maturities that total $1.9 billion.
=============
B A H A M A S
=============
FTX GROUP: Lenient Sentence Sought for Former Tech Chief
--------------------------------------------------------
Rachel Scharf at law360.com reports that Manhattan federal
prosecutors urged a lenient sentence for former FTX technology
chief Zixiao "Gary" Wang, telling the court that his "outstanding
cooperation" was instrumental in securing the lightning-fast
indictment and ultimate conviction of founder Sam Bankman-Fried for
an $11 billion fraud that sank the crypto exchange.
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9, 2022, struck a deal to
sell itself to its giant rival Binance, but Binance walked away
from the deal amid reports on FTX regarding mishandled customer
funds and alleged US agency investigations. SBF agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
billion in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
FTX GROUP: U.S. Go After Assets Used for Alleged China Bribes
-------------------------------------------------------------
Aislinn Keely at law360.com reports that U.S. prosecutors have
asked a New York federal judge to help secure millions of dollars
worth of digital assets held at cryptocurrency exchange Binance,
alleging the tokens are tied to what they described as bribes that
former FTX CEO Sam Bankman-Fried paid to Chinese law enforcement
officials.
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9, 2022, struck a deal to
sell itself to its giant rival Binance, but Binance walked away
from the deal amid reports on FTX regarding mishandled customer
funds and alleged US agency investigations. SBF agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
billion in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
=============
B O L I V I A
=============
BOLIVIA: Reversal of Gold Reserves Reporting Highlights Woes
------------------------------------------------------------
Juan Martinez at Rio Times Online reports that Bolivia's recent
attempt to loosen restrictions on its gold reserves highlights the
country's dire economic situation. The Central Bank of Bolivia
briefly introduced a measure allowing it to report gold holdings
biannually, potentially enabling it to dip below the legally
mandated minimum of 22 tons between reporting dates. This move was
quickly reversed due to concerns over economic speculation,
revealing the depth of Bolivia's financial crisis, according to the
report.
Rio Times Online notes the country's foreign currency reserves have
plummeted from $15 billion in 2014 to a mere $1.7 billion in late
2023. This decline, according to the report, stems from a perfect
storm of economic challenges:
1. Bolivia's natural gas exports, once a cornerstone of its
economy, have dwindled from $6 billion annually in 2014 to just $2
billion in 2023, leaving a gaping hole in the national budget.
2. For nearly 15 years, Bolivia maintained a fixed exchange
rate of 6.90 bolivianos per US dollar. This policy, while providing
stability, now strains the economy as foreign currency becomes
scarce. The shortage of dollars has cascaded through various
sectors, making it difficult for businesses to import essential
goods like medications, farming equipment, and mining supplies, the
report notes.
3. Inflation reached 7.26% by October 2024, more than double
the government's initial projection.
4. The government's fiscal policies, including a large public
sector deficit of 7.3% of GDP in 2022, have contributed to the
depletion of international reserves.
Rio Times Online further notes that a power struggle between
current President Luis Arce and former President Evo Morales
divides the ruling party, hampering effective decision-making on
crucial economic issues. This conflict has spilled onto the
streets, with protests and roadblocks disrupting economic
activities, the report says.
Bolivia's next presidential elections is in 2025.
As reported in the Troubled Company Reporter-Latin America on Oct.
8, 2024, S&P Global Ratings, on Oct. 4, 2024, affirmed its 'CCC+'
long-term foreign and local currency sovereign credit ratings on
Bolivia. The outlook on the long-term ratings remains negative.
S&P also affirmed its 'C' short-term foreign and local currency
sovereign credit ratings. The transfer and convertibility
assessment remains 'CCC+'.
Fitch Ratings downgraded Bolivia's credit rating to 'CCC' from 'B-'
in February, reflecting increased risk associated with the
country's economic management.
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B R A Z I L
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BRAZIL: Finance Minister Says Fiscal Measures to Be Announced
-------------------------------------------------------------
globalinsolvency.com, citing Reuters, reports that Brazil's Finance
Minister Fernando Haddad said fiscal measures to support the
country's fiscal framework could be announced soon, adding that the
government is in the final stages of preparation for the
announcement.
Speaking to reporters, he said President Luiz Inacio Lula da Silva
is expected to call him later for a meeting on the matter,
according to the report.
"After the meeting with him, I'll speak with you," he added.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian
general election. He was sworn in on January 1, 2023, as the 39th
president of Brazil, succeeding Jair Bolsonaro.
Moody's credit rating for Brazil was last set at Ba2 with positive
outlook as of May 2024. S&P Global Ratings raised on Dec. 19,
2023, its long-term global scale ratings on Brazil to 'BB' from
'BB-'. Fitch Ratings affirmed on Dec. 15, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB' with a Stable
Outlook. DBRS' credit rating for Brazil was last reported at BB
with stable outlook at July 2023.
GOL LINHAS: Reaches US$950M Debt-to-Equity Deal With Abra Group
---------------------------------------------------------------
GOL Linhas Aereas Inteligentes S.A. (B3: GOLL4), one of the leading
airlines in Brazil, and Abra Group Limited, GOL's largest secured
creditor and the majority investor of GOL and Avianca Group
International Limited, announced that both companies and certain of
their affiliates as well as the committee of unsecured creditors
appointed in GOL's Chapter 11 cases have reached a Plan Support
Agreement in connection with GOL's Chapter 11 cases commenced in
January 2024.
Pursuant to the PSA, GOL will file a Chapter 11 plan of
reorganization that will allow it to effectuate a significant
deleveraging by converting into equity, or otherwise extinguishing,
up to US $1.7 billion of its prepetition funded debt and up to US$
850 million of other obligations. Abra has asserted US$ 2.8 billion
in funded debt claims and has agreed to receive approximately US$
950 million in new equity and possibly more, based upon the
resolution of certain unresolved issues, as well as US$ 850 million
of take-back debt. Of the Abra take-back debt, US$ 250 million is
mandatorily convertible into new equity on or after the 30-month
anniversary of GOL's emergence from Chapter 11 based on GOL
achieving certain valuation metrics. GOL's general unsecured
creditors will also receive new equity valued up to approximately
US$ 235 million and possibly more, based upon the resolution of
certain unresolved issues. With the PSA, GOL and its stakeholders
benefit from removal of cost and uncertainty of any litigation
regarding these asserted claims and move to the next phase of the
Chapter 11 cases.
GOL anticipates raising up to US $1.85 billion of new capital in
the form of an exit facility to repay GOL's Debtor-in-Possession
financing facility and provide incremental liquidity to support
GOL's go-forward strategy following its emergence from Chapter 11.
Although such capital will be raised principally in the form of
long-term, senior secured debt, under the terms of the PSA, GOL may
raise up to US$ 330 million in the form of additional new equity.
Abra and the Committee have agreed to support GOL and its advisors
in arranging the exit facility.
Since filing for Chapter 11 protection in January 2024, GOL
obtained the DIP Loan in the amount of US$ 1.0 billion. The DIP
Loan, along with approximately US$ 375 million of new financing
from lessors, has allowed GOL to reinvest in its aircraft fleet.
GOL has already returned a substantial portion of its previously
grounded 737 fleet back into active service and expects to be
substantially completed with that rebuilding program as it emerges
from its Chapter 11 case. GOL continues to operate in the normal
course during its court-supervised process.
Abra and the Committee agree to support any request by GOL to
extend GOL's exclusive right to file and solicit votes on a Chapter
11 plan through the date on which the Chapter 11 plan contemplated
by the PSA takes effect. GOL expects to file its Chapter 11 plan of
reorganization with the U.S. Bankruptcy Court before the end of
2024 and currently expects to exit by late April 2025.
"Reaching this agreement is another important step in our efforts
to strengthen our financial position and drive GOL's long-term
success," said Celso Ferrer, Chief Executive Officer. "We are
pleased to be moving forward with the support of our key financial
stakeholders, which reflects their confidence in our business plan
and the significant opportunities ahead for GOL. With this
agreement, we now have most of the key terms of our restructuring
plan in place. We look forward to arranging the necessary capital
commitments to emerge from this process better positioned than ever
to execute our long-term strategy, including improving travel
affordability and experience as well as customer choice. We thank
our employees for their continued focus on serving our customers
with excellence as we advance our mission of 'Being First for
All'."
"GOL is slated to emerge from its Chapter 11 process with a
dramatically improved liquidity position and a deleveraged balance
sheet with a very competitive unit cost and strong network. We also
see significant opportunities to build upon our efforts to
capitalize on synergies among GOL, Avianca and our other partner
airlines," said Adrian Neuhauser, CEO of Abra Group.
The commercial negotiations that led to the finalization of the PSA
were primarily conducted by GOL's Special Independent Committee,
consisting solely of independent directors. This committee,
ensuring a rigorous and impartial assessment, spearheaded the
entire negotiation process, culminating in approval by GOL's Board
of Directors. Notably, directors affiliated with Abra that serve on
GOL's Board of Directors recused themselves from all stages of the
discussion, review, and voting on the PSA, to avoid any actual or
perceived conflicts of interest and to maintain the integrity of
the negotiation process.
As stated above, the PSA contemplates a conversion of a significant
portion of GOL's debt and other obligations into equity. This
conversion, structured to reflect the economic value of GOL's
shares as mandated by law, is expected to result in significant
dilution of GOL's existing equity. Throughout the restructuring
process, all shareholder rights will be fully preserved, including
preemptive rights, as stipulated under Article 171 of Brazilian Law
No. 6,404 (1976).
Advisors
In connection with its restructuring efforts, GOL is working with
Milbank LLP as legal counsel, Seabury Securities, LLC as investment
banker and restructuring advisor, and AlixPartners, LLP as
financial advisor. In addition, Lefosse Advogados is serving as
GOL's Brazilian counsel.
Abra is working with Wachtell, Lipton, Rosen & Katz as legal
counsel and Rothschild & Co as financial advisor in connection with
the restructuring. In addition, Pinheiro Guimarães is serving as
Abra's Brazilian counsel.
In connection with the restructuring, the Committee is working with
Willkie Farr & Gallagher LLP as legal counsel, Jefferies LLC as
investment banker, Alvarez & Marsal North America, LLC as financial
advisor, and Alton Aviation Consultancy LLC as aviation advisor.
Additionally, Stocche, Forbes, Filizzola, Clapis e Cursino de Moura
Sociedade de Advogados is serving as the Committee's Brazilian
counsel.
About Gol GOLL4.SA
GOL Linhas Aereas Inteligentes S.A. provides scheduled and non
scheduled air transportation services for passengers and cargo; and
maintenance services for aircrafts and components in Brazil and
internationally. The company offers Smiles, a frequent-flyer
programs to approximately 20.5 million members, allowing clients to
accumulate and redeem miles. It operates a fleet of 146 Boeing 737
aircraft with 674 daily flights. The company was founded in 2000
and is headquartered in Sao Paulo, Brazil.
GOL Linhas Aereas Inteligentes S.A. and its affiliates and its
subsidiaries voluntarily filed for Chapter 11 protection (Bankr.
S.D.N.Y. Lead Case No. 24-10118) on Jan. 25, 2024.
GOL Linhas estimated $1 billion to $10 billion in assets as of the
bankruptcy filing.
The Debtors tapped MILBANK LLP as counsel, SEABURY SECURITIES LLC
as restructuring advisor, financial advisor and investment banker,
ALIXPARTNERS, LLP, as financial advisor, and HUGHES HUBBARD & REED
LLP as aviation related counsel. KROLL RESTRUCTURING ADMINISTRATION
LLC is the claims agent.
=========
C H I L E
=========
WOM SA: Gets $500M Stalking Horse Proposal for Restructuring Plan
-----------------------------------------------------------------
The special committee of independent directors of WOM S.A.
announced November 1 that it received a binding stalking horse
proposal for a restructuring transaction, which it is in the
process of negotiating into final form. The transaction terms being
negotiated contemplate a new money investment of approximately
US$500 million through a fully-backstopped rights offering and an
enterprise value of US$1.6 billion.
The restructuring, which is contemplated to be carried out through
a plan of reorganization, would repay the Company's US$210 million
debtor-in-possession financing in full in cash, substantially
deleverage the Company's balance sheet, and yield meaningful
recoveries to unsecured creditors in the form of cash, take-back
debt, and/or equity in the reorganized Company. The transaction is
subject to final documentation and approval by the U.S. Bankruptcy
Court for the District of Delaware and the Company's ongoing
marketing process. Other potential bidders are actively engaged in
due diligence evaluating a potential acquisition of the Company and
the deadline for Qualified Bids remains November 15, 2024.
WOM Chile's Chief Executive Officer, Martín Vaca Narvaja, said: "I
am excited by the continued progress in WOM's restructuring. The
contemplated transaction provides for new capital sufficient to
fully fund the Company's business plan, including the remainder of
its 5G buildout, ensuring business continuity while deleveraging
WOM's balance sheet to position it for future growth. In the coming
weeks we look forward to completing the marketing process,
finalizing transaction documentation and seeking U.S. Bankruptcy
Court approval to enable WOM's emergence from Chapter 11 in early
2025."
Co-Counsel to Debtors and Debtors-in-Possession:
John H. Knight, Esq.
Amanda R. Steele, Esq.
Brendan J. Schlauch, Esq.
Alexander R. Steiger, Esq.
Gabrielle A. Colson, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
920 North King Street
Wilmington, DE 19801
Telephone: (302) 651-7700
Email: knight@rlf.com
steele@rlf.com
schlauch@rlf.com
steiger@rlf.com
colson@rlf.com
Co-Counsel to Debtors and Debtors-in-Possession:
John K. Cunningham, Esq.
Richard S. Kebrdle, Esq.
WHITE & CASE LLP
Southeast Financial Center
200 South Biscayne Boulevard, Suite 4900
Miami, FL 33131
Telephone: (305) 371-2700
Email: jcunningham@whitecase.com
rkebrdle@whitecase.com
- and -
Philip M. Abelson, Esq.
Andrew Zatz, Esq.
Andrea Amulic, Esq.
Lilian Marques, Esq.
Claire Tuffey, Esq.
WHITE & CASE LLP
1221 Avenue of the Americas
New York, NY 10020
Telephone: (212) 819-8200
Email: philip.abelson@whitecase.com
azatz@whitecase.com
andrea.amulic@whitecase.com
lilian.marques@whitecase.com
claire.tuffey@whitecase.com
About WOM SA
WOM is a Chilean telecommunications provider, focused on offering
mobile voice, data, and broadband services, along with a rapidly
expanding "Fiber to the Home" broadband offering, to consumers and
businesses in Chile. Since the acquisition of Nextel Chile in 2015
through Novator Partners LLP's investment vehicle NC Telecom AS,
WOM has expanded from having virtually no market share to
establishing itself as the second-largest mobile network operator
in Chile.
WOM sought relief under Chapter 11 of the Bankruptcy Code (Bankr.
D. Del. Lead Case No. 24-10628) on April 1, 2024. In the petition
filed by Timothy O'Connoer, as independent director, the Debtor
estimated assets and liabilities between $1 billion and $10 billion
each.
The Honorable Bankruptcy Judge Karen B. Owens oversees the case.
The Debtors tapped White & Case, LLP as general bankruptcy counsel;
Richards, Layton & Finger, P.A. as local bankruptcy counsel;
Riveron Consulting, LLC, as financial advisor; and Rothschild & Co
US Inc. as investment banker. Kroll Restructuring Administration,
LLC, is the claims agent.
===============
C O L O M B I A
===============
COLOMBIA: Central Bank Cuts Key Rate to 9.75%
---------------------------------------------
globalinsolvency.com, citing Bloomberg News, reports that
Colombia's central bank ignored pressure to accelerate the pace of
interest rate cuts as policymakers weigh fiscal risks that sent the
peso to its weakest level in more than a year.
The seven-member board voted 4-3 to lower the benchmark rate by
half a percentage point to 9.75%, Governor Leonardo Villar told
reporters in Bogota, according to the report. The minority voted
for a bigger reduction, to 9.5%, the report notes.
As reported in the Troubled Company Reporter on Aug. 7, 2024, Fitch
Ratings has affirmed Colombia's Long-Term Foreign Currency Issuer
Default Rating (IDR) at 'BB+' with a Stable Rating Outlook.
===============
X X X X X X X X
===============
LATAM: Inflation Jumps in Brazil, Chile
---------------------------------------
globalinsolvency.com, citing Bloomberg News, reports that inflation
smashed through the top of the central bank's tolerance range in
Brazil and accelerated much more than expected in Chile as surging
energy costs give policymakers another reason to worry.
Official data released showed Brazil's consumer prices rose 4.76%
in October from the year prior, above the 4.5% tolerance ceiling of
the central bank's goal, according to the report.
Chile's cost of living posted the biggest monthly rise since March
2023 as annual inflation sped up to 4.7%, the report adds.
*********
S U B S C R I P T I O N I N F O R M A T I O N
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