Corporate Debt Restructuring Masterclass

18 July 2022 (Mon), 5pm Singapore/HK time

Days after Singapore Airlines (SIA) was questioned on its privatization plans from investor watchdog SIAS, the airline has clarified that it is not a matter for SIA to consider, given that it is a shareholder action. SIA added that the proceeds from its Mandatory Convertible Bonds (MCBs) worth $6.2bn will last through the financial year ending 2023. SIA added that the MCB issuance garnered almost 100% approval from shareholders in April 2020, and also similar support when the resolution was presented again in July 2020. They added that the issuance is not immediately dilutive even as proceeds from the MCBs will be treated as equity in the balance sheet. The MCBs would provide it with funding certainty and capital structure flexibility especially with the absence of coupons. The carrier also noted that operating cash burn has been reduced to S$100mn-S$150mn a month from S$350mn earlier.

SIA’s bonds were stable – its USD 3% 2026s were at 101.4, yielding 2.7% and its SGD 3.03% 2024s were at 103.4, yielding 1.8%.

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