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Singapore Airlines capital raising receives questions from Singapore's securities investors association
May 31st 2021
The Securities Investors Association of Singapore (SIAS) has written to Singapore Airlines (SIA) seeking more details about the company's upcoming capital raising. Read More » Earlier this month, SIA announced it planned to raise another S$6.2 billion (US$4.7 billion) through the sale of mandatory convertible bonds (MCB), arguing the fund-raising will allow the airline group to maintain a strong equity base and provide "additional options moving forward to raise further debt financing as necessary". SIAS CEO, David Gerald, said there was a "tepid" response to the last MCB issue, with major shareholder, Temasek, holding about 96% of all bonds issued, above its 55.4% shareholding. "This signifies most investors as well as directors chose to lapse their rights to MCB," Gerald wrote in a letter to SIA Group CEO, Goh Choon Phong, and published on the SIAS website. "Many believe the MCB has a suboptimal return-risk profile – where it provides no income and with a paltry pay off of 4%-6% per annum upon redemption after some years," he said. Gerald also asked "how critical" was this issuance for SIA as a group over the near- and longer-term, among other questions.
