Gol Advances on Progress for Mileage Unit’s IPO: Sao Paulo MoverDenyse Godoy
Gol Linhas Aereas Inteligentes SA, Brazil’s second-biggest air carrier by market share, rose after saying it selected the banks to manage an eventual initial public offering of its frequent-flier unit.
Gol climbed 1.2 percent to 14.57 reais at the close of trading in Sao Paulo. The benchmark Bovespa index declined 1.3 percent.
The airline moved a step closer to an IPO of the Smiles SA unit, saying in a statement after the market closed last week that its board will meet on Feb. 8 to discuss the banks selected to manage the sale. It didn’t identify the banks or give a date for the IPO.
“Gol is taking every necessary step in order to do this offer,” Marcelo Varejao, an analyst at brokerage Socopa Corretora, said by phone from Sao Paulo. “Besides raising cash, the deal will allow the market to effectively give some value to a good asset investors cannot price correctly now in Gol’s shares because they have no detailed information about it.”
The carrier is cutting flights, firing workers and seeking to renegotiate terms on 1.1 billion reais ($551 million) of bank debt as it faces rising fuel costs that have led to 1.85 billion reais of net losses over the past six quarters.
Gol gained 12 percent in the past year, while the Bovespa lost 8.7 percent.