[ad_1]
Mon, November 09, 2020 – 1:35 PM
SINGAPORE Airlines (SIA) has yet to make a decision on the issuance of additional mandatory convertible bonds (MCBs) worth S $ 6.2 billion. Nor could it say how long the airline’s current liquidity would last, given that “the market is very dynamic” now.
In an earnings call Monday, key executives at the flag carrier told media and analysts that SIA is exploring additional means, including selling and leasing some of its aircraft, and further tapping into the capital market of debt to increase liquidity.
SIA had spent S $ 6.2 billion as of October 13 of the S $ 8.8 billion raised from the June rights issue. It has not decided whether it will issue another S $ 6.2 billion in MCB. The airline has until the next annual general meeting to make a decision.
Chief Executive Officer Goh Choon Phong said “the market is very dynamic” as the coronavirus testing regimen could be further improved and this could stimulate travel demand. However, he warned that there could also be a resurgence of the infection in some countries, which could curb demand.
Therefore, it could not say when the carrier’s current liquidity would be depleted, given how changes in the market affect its cash flows.
However, SIA has managed to reduce the monthly cash burn rate from S $ 350 million in the May to July period, to less than S $ 300 million now. It also has lines of credit of S $ 1.7 billion.
Although it has been active in opening up new revenue streams, including the recent A380 dining experience and behind-the-scenes tours of its training facilities, it is still “premature” to assess how much they will contribute to its finances, the airline said.
SIA assumed an impairment charge of S $ 1.3 billion for the recall of 26 surplus aircraft following a network and fleet review. He hopes that there will be no deterioration of the aircraft in the near future.
SIA’s shares were trading at S $ 3.44 as of 1:17 pm Monday, down S $ 0.04 or 1.2%.
[ad_2]
