Gol is barred from listing in the Novo Mercado segment and should review its plan to merge with Smiles

After the decision taken by the B3’s Commission for the Listing of Issuers and for the Admission of Securities for Trading on the inadmissibility of the company’s migration to the Novo Mercado, Gol announced on Monday (17) it cancelled its migration to B3’s special listing segment, in compliance with the stock exchange’s decision. In a document sent to Gol, Gilson Finkelsztain, B3’s CEO, explained that the decision aims to “prevent operations that can represent infractions to the Novo Mercado’s regulation, to mitigate eventual adverse effects that may be caused by acts that would take place while the operation was implemented” and provide the group with “the opportunity to timely evaluate alternative structures to reach the objectives intended with the reorganization.”

On October 22, the Association of Capital Market Investors – Amec – sent a letter to the B3 requesting the stock exchange to analyze the possibility of interfering in the transaction. In the document sent to the CEO Gilson Finkelsztain, Amec requested the B3 to prohibit the reorganization as it was proposed by Gol.

For investors, the problem was that Gol designed a reorganization structure that, in theory, met the requirements established by the stock exchange in terms of protecting shareholders’ rights but, in practical terms, made them ineffective. By announcing the migration to the Novo Mercado segment, the airline company would get rid of the obligation of submitting the reorganization to the approval of free float shareholders. The problem is that the new structure would create two companies: Gol S.A., listed in the Novo Mercado segment, and GLA. The first one would be a non-operating holding; the second one would detain all relevant operating activities of Gol and Smiles and, apparently, would be a non-listed company.

The President Letter 14/2018 – Reorganization of Gol Linhas Aéreas and Smiles is available here.

Click here to read Valor Econômico newspaper’s article about the case.

Gol’s Material Fact and B3’s letter to the company are available here.