Left Menu
Development News Edition

Singapore Airlines taps investors for up to $10.5 bln amid coronavirus shock

Reuters | Updated: 27-03-2020 01:38 IST | Created: 26-03-2020 23:59 IST
Singapore Airlines taps investors for up to $10.5 bln amid coronavirus shock
Image Credit: Wikimedia Commons

Singapore Airlines (SIA) is tapping existing investors for up to S$15 billion ($10.48 billion) through the sale of shares and convertible bonds to offset the shock to its business from the coronavirus outbreak. The fundraising is being underwritten by the airline's biggest investor, state-owned Temasek Holdings, which owns about 55% of the group.

"This is an exceptional time for the SIA Group," SIA chairman Peter Seah said in a statement late on Thursday. SIA's shares went into a rare trading halt earlier in the day after plunging to their lowest in 22 years as investors feared the pandemic will have a deep impact on the company.

Many governments worldwide have already stepped in to help airlines hammered by the virus-induced travel slump, with the United States offering $58 billion in aid as widespread travel restrictions force many carriers to ground fleets and order thousands of workers on unpaid leave to keep afloat. SIA has said it will cut capacity by 96%, ground almost its entire fleet and impose cost cuts affecting about 10,000 staff in what it called the "greatest challenge" it had ever faced.

The airline said it would issue S$5.3 billion in new shares to current shareholders and also issue 10-year bonds to raise up to a further S$9.7 billion. In addition, it has arranged a S$4 billion bridge loan facility with DBS Bank to support the company's near-term liquidity requirements.

The rights issue will be offered at S$3 per share, a 53.8% discount to SIA's last traded price of S$6.5. "This transaction will not only tide SIA over a short term financial liquidity challenge but will position it for growth beyond the pandemic," said Dilhan Pillay Sandrasegara, CEO of Temasek International.

SIA said it would use the funding from the rights issues to beef up its capital and operational expenditure needs. On Thursday, the Singapore government announced more than $30 billion in new measures to help businesses and households brace against the pandemic which is threatening to push the bellwether economy into a deep recession.

Earlier on Thursday, Singapore finance minister Heng Swee Keat had said that SIA would announce support from Temasek and that he welcomed Temasek's decision to support the airline. Qantas Airways this week also secured A$1.05 billion ($636.1 million) against its aircraft fleet to help it ride out the coronavirus crisis, sending its shares soaring. ($1 = 1.4313 Singapore dollars) ($1 = 1.6507 Australian dollars)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Download The Devdiscourse News App for Latest News.



Globalization post-coronavirus to get a hit, self-sufficiency paradigm to rule

The massive scale of coronavirus outbreak, accompanied by uncertainty and fear, could lead to new behaviors and beliefs in the 21st-century population that is empowered with the internet....

Ayurveda for COVID 19: Professionals owe the responsibility to protect it from quacks and fake news

Indian Ayurveda professionals are lagging behind their foreign counterparts in handling quacks and protecting credentials of the Ayurveda at the time of COVID 19 pandemic. The professionals of Ayurveda cannot abjure the responsibility to co...

Education post-coronavirus: Schools to rush for more digitalization

Digital education would undoubtedly boom in the post-coronavirus world, supported by educational institutions that have discovered its efficiency during the crisis, but it is still not expected to outshine traditional classroom learning....


Latest News

Australian authorities take cluster approach to contain coronavirus

Australian authorities will open a pop-up coronavirus testing clinic next to Sydneys Bondi Beach on Wednesday as health workers try to contain clusters of infections across the country.While strict lock-down measures are now in place in Aus...

Tennis-Patrick McEnroe feeling fine after mild case of coronavirus

Retired tennis player Patrick McEnroe has recovered from a mild case of coronavirus, he announced on social media on Tuesday. McEnroe, younger brother of seven-times Grand Slam champion John, said he had been tested after experiencing some ...

Trump says he may join Saudi, Russia in talks on oil prices

U.S. President Donald Trump said on Tuesday he would join Saudi Arabia and Russia, if need be, for talks about the sharp fall in oil prices resulting from a price war between the two countries.The two countries are discussing it and I am jo...

Loss of taste, smell key COVID-19 symptoms -British scientists' study

Losing your sense of smell and taste may be the best way to tell if you have COVID-19, according to a study of data collected via a symptom tracker app developed by British scientists to help monitor the pandemic caused by the new coronavir...

Give Feedback