Shareholders snap up SIA rights shares but snub MCBs

Valid acceptances and excess applications were received for $2.08 billion in principal amount of rights MCBs, representing just 59.6 per cent of the $3.5 billion in aggregate principal amount of rights MCBs available. Most directors of SIA chose to l
Valid acceptances and excess applications were received for $2.08 billion in principal amount of rights MCBs, representing just 59.6 per cent of the $3.5 billion in aggregate principal amount of rights MCBs available. Most directors of SIA chose to let their rights MCBs lapse without exercising them.ST PHOTO: DESMOND WEE

Rights shares fully subscribed; less interest in mandatory convertible bonds

The rights issue of shares by Singapore Airlines (SIA) has been fully subscribed, though shareholders were less keen to participate in the rights issue of mandatory convertible bonds (MCBs), application results out yesterday showed.

At the close of the rights issue last Thursday, valid acceptances and excess applications were received for 2.13 billion rights shares, representing close to 120 per cent of the 1.78 billion rights shares available under the rights issue.

Controlling shareholder Temasek, which owns 55.5 per cent of SIA, took up its full pro-rata entitlement of 986 million rights shares.

A total of 67 million rights shares that were not validly taken up will be allotted to satisfy excess applications. SIA directors and substantial shareholders like Temasek will rank last in priority for the rounding of odd lots and the allotment of excess rights shares.

The rights issue of MCBs was undersubscribed.

Valid acceptances and excess applications were received for $2.08 billion in principal amount of rights MCBs, representing just 59.6 per cent of the $3.5 billion in aggregate principal amount of rights MCBs available.

Of this, $1.94 billion was attributed to Temasek's pro-rata entitlement to the rights MCBs.

The balance $1.41 billion in principal amount of unsubscribed rights MCBs, representing 40.4 per cent of the total amount of MCBs available, will be taken up by Temasek.

Most directors of SIA have chosen to let their rights MCBs lapse without exercising them, despite proposing the MCB rights issuance to shareholders as part of a larger fund raising in April.

SIA chief executive Goh Choon Phong let his provisional allotments in respect of 3.34 million rights MCBs lapse last week, according to a Singapore Exchange filing on Monday.

Filings also showed that SIA non-executive chairman Peter Seah let his allotment of 73,160 rights MCBs lapse last week as well.

 
 
 
 

However, both Mr Goh and Mr Seah have applied to take up all their rights shares.

Other SIA directors that let their rights MCBs lapse included Mr Gautam Banerjee, chairman of Blackstone Singapore, and Mr Simon Cheong of SC Global Developments. However, Mr Banerjee and Mr Cheong did subscribe for their rights shares entitlements.

Three other directors, Mr David John Gledhill and Mr Dominic Ho of DBS Bank and Allen & Gledhill managing partner Lee Kim Shin, took up neither the rights shares nor the rights MCBs.

The Business Times understands that this could be due to Mr Gledhill and Mr Ho counting as foreign shareholders.

The rights are not offered to shareholders with registered addresses outside Singapore.

A spokesman for SIA said: "The SIA directors act in their personal capacity as shareholders and we do not comment on their individual investment decisions."

THE BUSINESS TIMES

A version of this article appeared in the print edition of The Straits Times on June 03, 2020, with the headline 'Shareholders snap up SIA rights shares but snub MCBs'. Print Edition | Subscribe