Singapore Airlines' S$6.2b MCB rights issue undersubscribed

Fiona Lam
Published Fri, Jun 18, 2021 · 08:55 PM

TEMASEK Holdings will again take up the lion's share of Singapore Airlines' (SIA) mandatory convertible bonds (MCBs), with the second tranche being undersubscribed.

The flag carrier received valid acceptances and excess applications for S$3.76 billion in principal amount of the rights MCBs, representing just 60.6 per cent of the S$6.2 billion available under the rights issue.

This included S$3.43 billion taken up by C6L : C6L 0%  controlling shareholder Temasek and its wholly-owned subsidiary Napier Investments under their pro-rata entitlement to the MCBs in the rights issue. That made up slightly more than half of the total principal amount available.

The balance S$2.44 billion that was unsubscribed, representing 39.4 per cent of the total amount of rights MCBs, will also be mopped up by a Temasek unit.

The newly issued MCBs will be listed on the Singapore Exchange on or about June 25, and trading is expected to commence at 9am the same day.

SIA's board of directors on Friday thanked shareholders for their support for the company by participating in the rights issue.

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Earlier this month, the airline group said it expects the additional S$6.2 billion raised from these MCBs to last it till the financial year ending March 2023.

In June 2020, the first tranche of rights MCBs likewise saw few takers, with valid acceptances and excess applications received for only 59.6 per cent of the S$3.5 billion in principal amount that was available. That also included S$1.94 billion from Temasek's pro-rata entitlement.

Shares of SIA rose 1.2 per cent or S$0.06 to close at S$5.05 on Friday, before it announced the results of the rights issue.

READ MORE: 

  • Should investors answer SIA's call for more cash?
  • SIA expects MCB's S$6.2b to last till early 2023; privatisation is shareholders' call
  • MCBs may be better play on SIA's recovery than shares: Phillip

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