SGX-ST approves listing of SIA's proposed $8.8b rights issue

About $3.7b will be used to fund expenses incurred amidst reduced operation.

Singapore Airlines (SIA) has received the approval in principle from the Singapore Exchange Securities Trading Limited (SGX-ST) for the listing and quotation on the mainboard of its renounceable rights issue aiming to raise $8.8b, the company announced.

This includes the listing of up to 1.78 billion rights shares amounting to $5.3b, as well as up to $3.5b in aggregate principal amount of mandatory convertible bonds (MCBs) to be converted to up to 1.3 billion new shares.

It will also have further MCB conversion shares to be issued following any adjustments made to its conversion price.

According to a previous bourse filing, the company plans to use 42% or $3.7b to fund fixed costs and other operating expenses incurred as it faced a period of reduced operation. Around $3.3b will be used for aircraft purchases and payments, and the remaining $1.8b for debt service and other contractual payments.

This followed after the company recorded declines in passenger revenues as pandemic led to a global collapse in demand for air travel, SIA said.

The rights issue is still subject to the approval of shareholders at an extraordinary general meeting to be convened by the company.

SIA is also seeking the approval of shareholders for the further issuance of up to about $6.2b aggregate principal amount of additional MCBs to be offered through one or more further rights issues at a later date by its sole discretion.