SIA's $6.2b mandatory convertible bond rights issue undersubscribed

Temasek 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 $3.76 billion in principal amount of the rights MCBs, representing just 60.6 per cent of the $6.2 billion available under the rights issue.

This included $3.43 billion taken up by SIA's 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 $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 around Friday, and trading is expected to commence at 9am the same day.

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

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

In June last year, 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 $3.5 billion in principal amount available. That also included $1.94 billion from Temasek's pro-rata entitlement.

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


A version of this article appeared in the print edition of The Straits Times on June 21, 2021, with the headline 'SIA's $6.2b mandatory convertible bond rights issue undersubscribed'. Subscribe