[ad_1]
SINGAPORE: Singapore Airlines (SIA) has raised S $ 850 million through a convertible bond issue, the national airline announced on Friday (November 13).
The offer was signed more than four times “with strong investor interest,” the SIA said in the press release.
READ: SIA share price soars up to 21% as markets applaud COVID-19 vaccine news
READ: Singapore Airlines confident of having ‘very strong liquidity’ while exploring new sources of funds to overcome COVID-19: CEO
“As a result, the issuance increased from the initial S $ 750 million to S $ 850 million with more attractive terms for SIA,” he added.
The five-year bonds, which have been placed with a variety of institutional investors, will have a coupon of 1.625 percent. They can also be converted into ordinary shares at a price of S $ 5,743.
This represents an increase of 45.8 percent from Thursday’s closing price of S $ 3.94.
“This issuance further strengthens the company’s liquidity position and reinforces its ability to overcome the challenges posed by the impact of the COVID-19 pandemic on the business,” SIA said.
He added that proceeds from the bonds will be used to finance capital and operating expenses and debt service.
HSBC bank is the sole book broker and principal administrator of the issue.
The airlines said “positive discussions” have taken place on aircraft sale and leaseback transactions, and that they will continue to explore other means to “strengthen … liquidity as necessary.”
SIA has raised approximately S $ 12.2 billion since the start of the 2020/2021 financial year, including Friday’s issuance.
The airlines said that for the period through July next year, they retain the option to raise up to S $ 6.2 billion in additional mandatory convertible bonds that would provide more liquidity if needed.
Earlier this week, SIA said it managed to reduce its monthly cash spending to “less than S $ 300 million,” up from S $ 350 million a month in the three months May through July.
READ: SIA Group Reports First Half Net Loss of S $ 3.5 Billion as Passenger Number Falls 98.9% Amid COVID-19
In the statement, CEO Goh Choon Phong said the placement was “successfully executed with a highly competitive coupon and a substantial conversion premium.”
“Such attractive terms for the company underscore the great confidence investors have in Singapore Airlines, as well as our ability to successfully overcome short-term challenges and emerge as a leader in the airline industry,” added Mr. Goh.
On Tuesday, SIA’s stock price rose as much as 21% during intraday trading to a five-month high as markets rallied on news that a candidate vaccine was 90% effective in treating patients with COVID-19.
