Singapore Airlines secures rescue funding to overcome Covid-19 downturn
Singapore Airlines will offer all shareholders S$5.3 billion in new equity and up to a further S$9.7 billion through ten-year mandatory convertible bonds.
Both will be offered on a pro-rata basis via a rights issue, and both issuances will be treated as equity in the company’s balance sheet.
Singapore Airlines’ majority shareholder, state-fund Temasek Holdings, said it would underwrite the sale of shares and convertible bonds for up to S$15 billion.
The carrier said it would use the cash to weather the Covid-19 storm and to expand once it has passed.
Singapore Airlines has also arranged a S$4 billion bridge loan facility with DBS Bank.
This money would be used to support the company’s near-term liquidity requirements, the airline added, until the share offering could be completed.
Singapore Airlines chairman, Peter Seah, said: “This is an exceptional time for the SIA Group.
ADVERTISEMENT
“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.”
He added: “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.”
The aviation sector is a key pillar of Singapore’s economy, supporting more than 12 per cent of the country’s GDP and 375,000 jobs.
The group is at the heart of the aviation ecosystem, with SIA, SilkAir and Scoot accounting for more than half of the passengers flying in and out of Changi Airport.
Coronavirus
For all the latest from Breaking Travel News on the coronavirus pandemic, take a look here.