Singapore Airlines Group has announced that it will raise a further SGD6.2 billion Singaporean dollars (USD4.7 billion) from its shareholders through mandatory convertible bonds (MCBs) after plunging to a SGD4.3 billion (USD3.2 billion) net loss in its worst year ever.
Following the publication of its annual financial results for the year ended March 31, 2021, Singapore Airlines said the fresh bond issuance would provide it with additional liquidity and more financial flexibility to navigate the period of emergence from the COVID-19 pandemic.
"This crisis is not over. While the growing pace of vaccinations has given us hope, new waves of infections around the world mean that restrictions on international travel largely remain in place... The liquidity that we will raise through the MCBs will further strengthen our financial position during these uncertain times, while providing the resources to position the SIA Group for growth and leadership," Group chairman Peter Seah said.
The airline stressed that the new issuance of MCBs covered the hitherto portion of the SGD9.7 billion (USD7.3 billion) capital raise, which shareholders approved in April 2020. The airline intends to allocate the bonds to eligible shareholders on a pro-rata basis. It stressed that should any of the minority shareholders chose not to participate, the main shareholder, Singaporean sovereign wealth fund Temasek Holdings, had undertaken to subscribe to the balance of the bonds on top of its pro-rata allocation.
SIA will file the issuance details with the Monetary Authority of Singapore by May 28, 2021.
In its annual report, the carrier revealed that it had impaired a further 12 aircraft (four B777-300(ER)s and eight B737-800s) surplus to its requirements, on top of the 33 it impaired in the first half of the financial year. The impairment charge for the additional 12 aircraft and the adjustment of the charge for the previously impaired four A320-200s totalled SGD286 million (USD215 million), while the total amount of aircraft impairments in the past financial year reached SGD1.7 billion (USD1.3 billion).
The carrier also confirmed that it planned to complete the retirement of the last three A330-300s operated by Singapore Airlines (SQ, Singapore Changi) during the current financial year. It also intends to finalise the integration of SilkAir (SLK, Singapore Changi) into Singapore Airlines by March 2022. The group's low-cost carrier, Scoot (TR, Singapore Changi), plans to take its first ten A321-200Ns during this financial year.
