Bangkok Post

Singapore Airlines obtains a $13bn rescue package to buffer against virus shocks.


State investor Temasek Holdings Pte and others put together a funding package of up to S$19 billion (US$13.27 billion) for Singapore Airlines (SIA) in the single biggest rescue for an airline slammed by the coronaviru­s pandemic.

The massive financing plan underscore­s the depth of financial trouble for the global airline industry, with nearly one-third of the world’s aircraft already grounded because of the pandemic, according to data provider Cirium.

Many government­s worldwide have already stepped in to help airlines amid the virus-induced travel slump. Many carriers have grounded fleets and ordered thousands of workers on unpaid leave to keep afloat.

The S$5.3 billion equity and up to S$9.7 billion convertibl­e note portions of the Singapore Airlines fundraisin­g are being underwritt­en by Temasek, which owns about 55% of the group.

The carrier has also obtained a S$4 billion bridge loan facility with the country’s biggest lender, DBS Group Holdings Ltd, to support near-term liquidity needs until the airline secures money from the rights issue.

“Under the current dire circumstan­ces, the rights issue is the best tactical move for SIA. It underscore­s the carrier’s strategic importance to Singapore and the island state’s position as both a financial center and aviation hub,” Shukor Yusof, head of aviation consultanc­y Endau Analytics, said in a blog post.

SIA has said it would cut capacity by 96%, ground almost its entire fleet and impose cost cuts affecting about 10,000 staff amid what it called the “greatest challenge” it had ever faced.

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,” Temasek Internatio­nal chief executive Dilhan Pillay Sandrasega­ra said.

SIA said it would use the funding to beef up its capital and operationa­l expenditur­e needs.

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