Singapore Airlines proposes issuing up to $850 million of convertible bonds

SIA expects to use the proceeds of the bonds to fund operating cash flow, debt service and capital expenditure.
SIA expects to use the proceeds of the bonds to fund operating cash flow, debt service and capital expenditure.ST PHOTO: JASON QUAH

SINGAPORE (THE BUSINESS TIMES) - Singapore Airlines (SIA) is proposing to issue up to $850 million in the principal amount of bonds, convertible into new ordinary shares in the company's capital, it announced on Thursday (Nov 12) after market close.

The convertible bonds are proposed to be placed with institutional investors and other investors. HSBC has been appointed as the sole book runner and lead manager for the issue.

The $850 million figure is an indicative size. The terms of the bonds, including the aggregate in principal amount to be issued, will be confirmed upon the pricing of the issue, after HSBC completes a book-building exercise.

Pricing was expected to come on or around Thursday, with SIA to make an announcement of the definitive terms afterwards.

SIA will apply to the SGX to list the convertible bonds and new shares. The issue of the bonds is conditional upon in-principle approval for their listing.

The closing date of the issue is expected to be on or about Dec 3. SIA expects to use the proceeds to fund operating cash flow, debt service and capital expenditure.

SIA said: "The financial effects of the issue will depend on the terms of the convertible bonds and be disclosed in the announcement to be issued by the company following the pricing of the issue."

The national carrier's shares closed up two Singapore cents or 0.51 per cent at $3.94 on Thursday, before the news.