Singapore, Mar 27 (PTI) The Singapore Airlines is tapping existing investors for up to 10.48 billion dollars through the sale of shares and convertible bonds to offset the shock to its business from the coronavirus outbreak, according to a media report.
The fund raising is being underwritten by the airline's biggest investor, Temasek Holdings, a state-investment group which owns about 55 per cent of the group.
'This is an exceptional time for the Singapore Airlines (SIA) Group,' Channel News Asia reported on Friday citing SIA chairman Peter Seah's statement issued on Thursday.
The airline's shares went into a rare trading halt earlier in the day after plunging to their lowest in 22 years as investors feared the COVID-19 pandemic will have a deep impact on the company.
The airlines is tapping existing investors for up to 25 billion Singaporean dollars (USD 10.48 billion) through the sale of shares and convertible bonds to offset the shock to its business from the coronavirus outbreak, the report said.
The SIA has said it will cut capacity by 96 per cent, ground almost its entire fleet and impose cost cuts affecting about 10,000 staff in what it called the 'greatest challenge' it had ever faced.
The airline said it would issue 5.3 billion Singaporean dollars in new shares to current shareholders and also issue 10-year bonds to raise up to a further 9.7 billion Singaporean dollars.
In addition, it has arranged a 4 billion Singaporean dollars bridge loan facility with the DBS Bank to support the company's near-term liquidity requirements.
The rights issue will be offered at 3 Singaporean dollars per share, a 53.8 per cent discount to SIA's last traded price of 6.5 Singaporean dollars.
'This transaction will not only tide SIA over a short-term financial liquidity challenge, but will position it for growth beyond the pandemic,' the Channel quoted Dilhan Pillay Sandrasegara, CEO of Temasek International, as saying.
SIA said it would use the funding from the rights issues to beef up its capital and operational expenditure needs. PTI GS AMS