Singapore Airlines to Issue S$5.3bil in New Equity and Raise up to S$9.7bil via Mandatory Convertible Bonds.

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Singapore Airlines Limited will offer all shareholders S$5.3 billion in new equity and up to a further S$9.7 billion through a 10-year Mandatory Convertible Bonds on a pro-rata basis via a rights issue. Both will be treated as equity in the Company’s balance sheet subject to shareholder approval at an extraordinary general meeting that will be held in due course. Temasek Holdings, the airline’s largest shareholder, will vote in favour of the resolutions and procure a subscription for its full entitlement and the remaining balance of both issuances.

The Airline has arranged S$4 billion bridge loan facility with DBS Bank to support the Company’s near-term liquidity requirements. The proceeds from the rights issues will be used to fund capital and operational expenditure requirements.

“This is an exceptional time for the SIA Group. Since the onset of the Covid-19 outbreak, passenger demand has fallen precipitously amid an unprecedented closure of borders worldwide. We moved quickly to cut capacity and implement cost-cutting measures. The strong commitment and support from our staff and our unions as we work together on measures to tackle this crisis have been remarkable. I am heartened that our people are doing everything they can, in these most difficult of times, to support our customers and sustain our operations. We have also worked closely with the Singapore government to bring Singaporeans home safely during this time. At the same time, we are also working with various parties to enable our staff on no-pay leave to have other income opportunities. We are especially grateful for Temasek’s strong vote of confidence. The Board is confident that this package of new funding will ensure that SIA is equipped with the resources to overcome the current challenges, and be in a position of strength to grow and reinforce our leadership in the aviation sector.”

SIA Chairman Peter Seah

Deputy Prime Minister Heng Swee Kiat mentioned in Parliament this afternoon that the aviation sector is a key pillar of Singapore’s economy. It supports over 12% of the country’s GDP and 375,000 jobs. The Group is the heart of the aviation ecosystem, with SIA, SilkAir and Scoot accounting for over half of the passengers flying in and out of Changi Airport.

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