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SINGAPORE Airlines Ltd. raised US$4.7 billion of convertible bonds along with cash reserves that will keep the company breathable through the fiscal year ending March 2023.
As reported by Bloomberg, Tuesday (1/6), the Lion Country’s flagship airline responded to a question from the Securities Investors Association last month about whether they had considered privatization. Singapore Airlines said that privatization should not be considered as it is a shareholder’s domain.
“Given that proceeds from the rights issue will be treated as equity on the balance sheet, this allows us to maintain a strong equity base and creates the option to raise further debt financing as needed,” the airline said in a statement.
It said Singapore Airlines had raised S$15.4 billion, including S$8.8 billion from a right offering since April last year and cut about 20% of its workforce to reduce costs.
The International Air Transport Association (IATA) in April increased its forecast for losses this year to around US$48 billion as the recent COVID-19 turmoil pulled back its schedule for commencing international air travel.
The situation is dire for airlines like Singapore Airlines which do not have a domestic market to rely on. The airline posted its worst annual loss at the end of March as COVID-19 continues to wreak havoc on global travel.
Temasek Holdings Pte, Singapore Airlines’ largest shareholder, has pledged to subscribe to prorated rights and the remaining balance from issuing convertible bonds, the airline said last month. Singapore Airlines’ monthly spending on operating funds has dropped to around S$100 million to S$150 million from S$350 million at the start of the pandemic. [bisnis.com/photo special]
