Singapore Airlines Group has raised SGD850 million Singapore dollars (USD632 million) via a convertible bond issue placed with a range of institutional investors, it announced on November 13.

The Singapore Airlines (SQ, Singapore Changi) parent said that the offer was more than four times oversubscribed and, as a result, it was increased from an initially mooted SGD750 million (USD557 million) to SGD850 million together with more attractive terms for the airline.

The five-year bonds will carry a coupon rate of 1.625% and can be converted into ordinary shares at a price of SGD5.743 (USD4.268), which was 45.8% above the price when markets closed on November 12. Proceeds will be used to fund operations, capital expenditures, and debt payments.

“This issuance further strengthens the company’s liquidity position and bolsters its ability to navigate the challenges posed by the impact of the Covid-19 pandemic on the business,” Singapore Airlines said in its statement. It added that “positive discussions have also taken place on aircraft sale-and-leaseback transactions, and the company will continue to explore other means to further strengthen our liquidity as necessary.”

The flag carrier, which is majority-owned by the government's Temasek Holdings, has now raised about SGD12.2 billion (USD9.1 billion) in liquidity since the start of the 2020/21 financial year in April. This consists of SGD8.8 billion (USD6.5 billion) from a Temasek-backed rights issue, SGD2 billion (USD1.5 billion) from secured financing, and a little over SGD500 million (USD370 million) from committed lines of credit and a short-term unsecured loan from financial institutions.

Including the new lines of credit, the company will continue to have access to more than SGD2.1 billion (USD1.56 billion) in committed credit lines, it said. It also has the option of raising up to SGD6.2 billion (USD4.6 billion) in additional mandatory convertible bonds, an option that would be supported by Temasek and can be activated until July 2021.

The announcement came a week after Singapore Airlines reported a record SGD2.34 billion (USD1.74 billion) net loss for the July-September quarter. Plunging passenger numbers due to Covid-19 pandemic saw revenues fall 81% to SGD783.8 million (USD582 million). Passenger capacity for the month of September was at 11% of the normal rate.

However, the loss also included an impairment charge of SGD1.333 billion (USD990 million) related to the withdrawal of 26 older aircraft, including two A319-100s, nine A320-200s, seven A380-800s, four B777-200(ER)s, and four B777-300s.

Singapore Airlines Group has deferred its outstanding aircraft on order with Airbus and is in advanced talks with Boeing with the same aim, it said without providing numbers. The group “has concluded negotiations with Airbus on a revised aircraft delivery schedule incorporating deferrals for part of the aircraft on order,” while talks with Boeing are “at an advanced stage.”

According to the ch-aviation fleets advanced module, the mainline carrier currently has orders outstanding for nineteen A350-900s, twenty B777-9s, and twenty-nine B787-10s. Low-cost unit Scoot (TR, Singapore Changi) has twenty-nine A320-200neo and six A321-200neo on order together with three B787-8s, and two B787-9s.

Regional carrier SilkAir (SLK, Singapore Changi), which is to be integrated into Singapore Airlines over the coming years, has outstanding orders for thirty-one of the globally grounded B737-8s. Indian subsidiary Vistara (UK, Delhi International) has thirteen A320neo and four B787-9s on order.

As part of the SilkAir transition, the first B737-800 in Singapore Airlines livery is expected to enter into service in the first quarter of 2021. SilkAir has seventeen of the type in its fleet that will change to the mainline fleet, and the first one of these, 9V-MGA (msn 44217), emerged in Singapore Airlines livery on October 28. It has not been deployed on any routes since March 20 and remains at Singapore Changi, ch-aviation analysis of Flightradar24 ADS-B data shows.

9V-MGA was repainted in early September, Singapore Airlines Group confirmed to ch-aviation in late October, adding that it had not yet been switched to the Singapore Airlines Air Operator's Certificate (AOC).

Meanwhile, no more A330-300 schedules have been filed by Singapore Airlines through to the end of 2020, ch-aviation schedule analysis has revealed. It currently operates six of this type. On this issue, Singapore Airlines had not responded to ch-aviation's request for comment at the time of going to press.