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SINGAPORE Airlines Limited (SIA) will offer all shareholders a new equity of S$5.3 billion (Singapore Dollars) and will increase equity to a value of S$ 9.7 billion through Conversion Bonds for 10 years. Both will be offered pro-rata through a limited public offering (rights issue), and both issuances will be treated as equity in the company’s balance sheet.
SIA has also arranged a S$4 billion short-term loan facility with DBS Bank, supporting the company’s short-term liquidity requirements. SIA intends to use the proceeds from the rights issue to fund capital needs and operational expenses. Both issuance of pre-emptive rights must obtain the approval of shareholders at an extraordinary general meeting (EGMS) which will be held on a schedule to be determined later.
SIA’s largest shareholder, Temasek Holdings, will support this resolution and purchase the full amount of rights and the remaining rights of the two issues.
According to Peter Seah, Chairman of SIA on his press release revealed this was an unusual time for the SIA Group. Since the beginning of the spread of the COVID-19 outbreak, passenger demand has dropped dramatically amid unprecedented global border closures. We move quickly to reduce capacity and implement cost reduction measures.
“The commitment and strong support of staff and trade unions is extraordinary, as we work together in an effort to overcome this crisis. I am heartened to see our staff doing everything they can, in these most difficult times, to provide support to customers and maintain operations,” he said.
He added, we have also been collaborating continuously with the Singapore government to bring Singaporeans home safely. At the same time, we also work with various parties to make it possible for our staff who are on unpaid leave to have the opportunity to earn other income.
The aviation sector is a key pillar of Singapore’s economy, supporting more than 12% of the country’s Gross Domestic Product (GDP) and providing 375,000 jobs. SIA Group is the heart of the aviation ecosystem, with SIA, SilkAir and Scoot responsible for more than half the number of passengers flying in and out of Changi Airport. [traveltext.id]
