SIA secures rescue funding to overcome Covid-19 downturn

Singapore Airlines (SIA) will offer all shareholders SGD 5.3 billion (USD 3.71 billion) in new equity and up to a further SGD 9.7 billion (USD 6.79 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.

The carrier said it would use the cash to weather the Covid-19 storm and to expand once it has passed. It has also arranged a 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.

Peter Seah, chairman of SIA said: “This is an exceptional time for the SIA Group. 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. At the same time, we are also working with various parties to enable our staff on no-pay leave to have other income opportunities.”

Singapore Airlines (SIA)Peter Seah