Fitch 10 Most Distressed LatAm Corporates: GOL's Poor Operational Results Increase Default Risk

jueves 4 de febrero de 2016 11:07 GYT

(The following statement was released by the rating agency) NEW YORK, February 04 (Fitch) Absent new shareholder capital, a default or debt restructuring in the next 12-24 months is a real possibility for Gol Linhas Aereas Inteligentes S.A. (GOL), according to Fitch Ratings in the latest report in our 10-report series titled '10 Most Distressed LatAm Corporates'. One report will be released each day through Feb. 12 per the schedule found at the bottom of this release. 'GOL's credit risk is substantial as it struggles to cover interest expenses and likely faces a negative free cash flow margin of about 10%, driven by negative EBIT margin,' said Jose Vertiz, Director. 'GOL's ability to maintain liquidity will be crucial during 2016. Managing traffic, the yield environment, raising costs and capex levels could all help minimize cash burn during 2016.' GOL's principal credit risk is demand deterioration, which will likely be exacerbated by economic conditions in Brazil and its impact on the top line. Devaluation of the Brazilian real against the U.S. dollar narrowed GOL's capacity to benefit from lower oil prices, and operating cost per available seat kilometer excluding fuel expenses will continue its upward trend in 2016. Fitch's 10 Most Distressed LatAm Corporates series will be released one report per day as follows: Feb. 1st: Samarco Mineracao S.A. Feb. 2nd: Companhia Siderurgica Nacional Feb. 3rd: Pacific Exploration and Production Corporation Feb. 4th: Gol Linhas Aereas Inteligentes S.A. Feb. 5th: Oi S.A. Feb. 8th: GeoPark Latin America Limited Agencia en Chile Feb. 9th: Ajecorp B.V. Feb. 10th: TV Azteca, S.A.B. de C.V. Feb. 11th: QGOG Constellation S.A. Feb. 12th: Odebrecht Offshore Drilling Finance Ltd. For more information, a special report titled 'Gol Linhas Aereas Inteligentes S.A.- Scenario Analysis' is available on the Fitch Ratings web site at or by clicking on the link. Contact: Jose Vertiz Director +1-212-908-0641 Fitch Ratings, Inc. 33 Whitehall Street New York, NY 10004 Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: Additional information is available at GOL Linhas Aereas Inteligentes S.A. - Scenario Analysis here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.