Gol Prices Smiles IPO Within Range at 21.70 Reais a Share

Smiles SA, the frequent-flier program for Brazil’s Gol Linhas Aereas Inteligentes SA (GOLL4), is raising as much as 1.13 billion reais ($565 million) in an initial public offering.

Smiles and its shareholders are selling as many as 52.2 million shares in the primary offering for the Sao Paulo-based company at 21.70 reais each, according to a filing today. That was within the projected range of 20.70 to 25.80 reais a share.

Gol will use the proceeds to help repay debt of 5.2 billion reais, the global industry’s highest as measured by the ratio of net debt to earnings before interest, taxes, depreciation and amortization. The airline is seeking to replicate the success of Multiplus SA (MPLU3), the mileage-rewards plan that was spun off by Latam Airlines Group SA (LFL) and has doubled since its IPO in 2010.

Smiles is the sixth IPO in Brazil this year, and the third this week. BB Seguridade Participacoes SA (BBSE3), Banco do Brasil SA’s insurance unit, is raising $4.2 billion today, and Alupar Investimento SA (ALUP11) raised $421 million on April 23.

Gol has jumped 23 percent since Dec. 20, the day before saying it was separating Smiles and considering an IPO. Sao Paulo-based Multiplus fell after the announcement and has tumbled 32 percent in 2013.

To contact the reporter on this story: Christiana Sciaudone in Sao Paulo at csciaudone@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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