Singapore Airlines (SIA) announced yesterday (21 Dec) that out of the $8.8 billion raised from the earlier rights issue in June this year, $7.1 billion had been cumulatively spent between 8 June and 13 December.
The amount spent averaged about $1.2 billion a month.
The $7.1 billion spent comprised of:
- $2 billion for the repayment of the bridging loan from DBS Bank which was set up in April 2020 to provide the liquidity required by the company prior to the completion of the rights issue.
- $1.8 billion for operating expenses during this period;
- $1.3 billion for ticket refunds;
- $1.8 billion for debt service, which included $1.1 billion for the repayment of lines of credit and $0.5 billion for the redemption of SIA’s 10-year Fixed Rate Notes on 9 July; and
- $0.2 billion for aircraft payments
“The Company will make further periodic announcements on the use of the remaining proceeds of the rights issue,” SIA said.
“While international air travel continues to be affected by the pandemic, the company will continue to be prudent and proactive in managing its liquidity.”
In addition to the $8.8 billion raised during the rights issue, SIA said that it has to-date also raised a total of $2.1 billion via loans secured on its aircraft, a short-term unsecured loan through a convertible bond issue ($850 million) and a private placement of new 10-year bonds ($500 million).
“Company also has approximately $2.1 billion of lines of credit available for drawing, and up to an additional $6.2 billion of mandatory convertible bonds to be issued, if the crisis prolongs,” it added.
That is to say, SIA will continue to borrow from the public if the pandemic crisis persists.
SIA is majority owned by Temasek Holdings. On June 5, SIA raised the $8.8 billion through a rights issue, which was backed by Temasek.
SIA slashes jobs and salaries amid pandemic
In September this year, SIA Group announced that it will slash about 2,400 staff across SIA, SilkAir and Scoot in Singapore as well as overseas station due to the unprecedented global aviation crisis.
In a press statement, SIA said that it had to cut about 4,300 position across its airlines, however, the retrenchment has been “mitigated by a recruitment freeze that was implemented in March 2020, open vacancies that were not filled, an early retirement scheme for ground staff and pilots, and a voluntary release scheme for cabin crew”.
As a result, the Group have eliminated some 1,900 positions and reduced the potential job cuts to about 2,400 across its airlines.
Earlier in March, the SIA group has announced that 96 per cent of its capacity that had been scheduled will be slashed after waves of increased border controls in many countries to contain the COVID-19 outbreak.
Of the total fleet of 147 planes, around 138 of SIA and SilkAir planes will be grounded. SIA’s budget unit, Scoot is going to suspend “most of its network” as it grounds 47 of its 49 planes.
In February, board directors’ fees and management salaries were slashed, alongside the introduction of voluntary no-pay leave scheme for workers up to certain management positions, SIA noted.
SIA CEO Goh receives $4.2m in remuneration
Meanwhile, it has been reported that SIA CEO Goh Choon Phong received a total of S$4,223,274 in remuneration for the last financial year ending on 31 Mar, despite SIA making huge losses (‘SIA CEO receives $4.2m in remuneration despite company losing $212m in last FY‘).
In May this year, SIA reported its first annual net loss in its 48-year history amidst the COVID-19 pandemic (‘Singapore Airlines posts first annual net loss in 48-year history after COVID-19 cripples demand‘, 14 May).
It reported a net loss of $212 million for the 12 months ending 31 Mar. In the 4th quarter alone (Jan – Mar 2020), it lost $732 million. In part, SIA’s losses stemmed from the US$638 million in charges it took on failed oil hedges.
Despite SIA reporting its first historic net loss of $212 million, Goh continues to receive bonuses of $1,046,967 and shares valued at $1,643,940.