Singapore Airlines to Raise $ 4.7 Billion After Worst Year in History
Singapore Airlines Group has announced that it will raise an additional SGD 6.2 billion (USD 4.7 billion) from its shareholders through mandatory convertible bonds (MCBs) after plunging to a net loss of SGD 4.3 billion ($ 3.2 billion) in its worst year ever.
Following the release of its annual financial results for the fiscal year ended March 31, 2021, Singapore Airlines said the new bond issue would provide it with additional liquidity and more financial flexibility to navigate the period of emergence of the COVID-19 pandemic.
“This crisis is not over. While the increasing pace of vaccinations has given us hope, new waves of infections around the world mean that restrictions on international travel remain largely in place … that we will collect through MCBs will further strengthen our financial position in these uncertain times, while providing the necessary resources to position the SIA Group for growth and leadership, ”said Peter Seah, Group President.
The airline pointed out that MCB’s new issue covered the portion so far of the SGD 9.7 billion (US $ 7.3 billion) capital increase that shareholders approved in April 2020. The airline has the intention to allocate the bonds to eligible shareholders on a pro rata basis. . He pointed out that if one of the minority shareholders chooses not to participate, the main shareholder, the Singaporean sovereign wealth fund Temasek Holdings, had undertaken to subscribe to the balance of the bonds in addition to its prorated allocation.
Details of the issue will be filed with the Monetary Authority of Singapore by May 28, 2021.
In its annual report, the carrier revealed that it had depreciated 12 other aircraft (four B777-300 (ER) and eight B737-800) in excess of its needs, in addition to the 33 years. The depreciation charge for the 12 additional aircraft and the charge adjustment for the four previously depreciated A320-200s totaled SGD 286 million (USD 215 million), while the total amount of aircraft depreciations during the year elapsed reached 1.7 billion SGD (1 USD. 3 billion).
The carrier also confirmed that it plans to complete the withdrawal of the remaining three A330-300s operated by Singapore Airlines (SQ, Singapore Changi) during the current fiscal year. It also intends to finalize the integration of SilkAir (MI, Singapore Changi) into Singapore Airlines by March 2022. The group’s low-cost company, Scoot (TR, Singapore Changi), plans to take its first ten A321-200N in during this exercise.