The Phnom Penh Post

SIA secures $7.2B of liquidity to combat coronaviru­s fallout

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SINGAPORE Airlines (SIA) has secured S$10 billion (US$7.2 billion) in fresh liquidity through its recent rights issue as well as through other credit facilities, as the airline industry navigates an unpreceden­ted crisis caused by the coronaviru­s pandemic.

A total of S$8.8 billion was raised through the rights issue on Friday, and a further S$900 million was secured through long-term loans secured on some of SIA’s Airbus A350-900 and Boeing 787-10 aircraft, Singapore’s flag carrier airline said in a statement on Monday.

SIA has also arranged new committed lines of credit and a short-term unsecured loan with several banks, which provide further fresh liquidity amounting to more than S$500 million.

It said “This puts SIA on a steady footing as it tackles the challenges posed by the global Covid-19 outbreak.

“During this period of high uncertaint y, SI A will continue to explore additiona l means to shore up liquidit y as necessar y.”

All existing committed lines of credit that were due to mature over this year have been renewed until next year or later, which ensures a continued access to more than S$1.7 billion in liquidity.

For the period up to July next year, the company also has the option to raise up to a further S$6.2 billion in additional mandatory convertibl­e bonds (MCB), which will provide additional liquidity if needed.

SIA CEO Goh Choon Phong thanked shareholde­rs and banks for their support, and said: “SIA will remain steadfast and agile during this period of great uncertaint­y, and continue to act nimbly in responding to the evolving market conditions.”

The airline had announced in March that its rights exercise involved the issue of 295 rights MCBs for every 100 SIA shares held. Each of the rights could be exercised at S$1 for one MCB.

The rights shares were issued on the basis of three rights shares for every two existing SIA shares owned by shareholde­rs.

Of the S$8.8 billion under the rights issue, the flag carrier said earlier that it will use S$3.7 billion to fund operating cash flow such as fixed costs and other operating expenses, while S$3.3 billion will go towards aircraft purchases and aircraft-related payments.

The remaining S$1.8 billion will be used for debt servicing and other contractua­l payments.

SIA has had to cancel most of its flights amid travel restrictio­ns worldwide and a drastic drop in demand for air travel due to the pandemic.

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