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SIA burns through half funds raised in just two months

written by Sandy Milne | August 20, 2020

An SIA A380-800 lands at Singapore Changi Airport.

Around half the proceeds of a US$6.4 billion capital raise have already been spent by Singapore Airlines’ parent company SIA Group since it was first completed on 5 June.

Operating at less than 10 per cent capacity, the Singaporean carrier has burned through more money in the two months leading up August than SIA, Cathay Pacific, and Qatar did in the first half of the year.

SIA has drawn down on US$1.6 billion between 15 June and 14 August, in addition to the use of US$1.6 billion previously outlaid in June.

The news broke as part of a 19 August disclosure to the Singapore Exchange (SGX), with SIA saying that approximately US$803 million was used to fund operating expenses, settle maturing fuel hedging trades, and refund tickets owed to customers following the cancellation of flights as border controls ratcheted up.

Prior to that, SIA Group had said on 16 June that it utilised about US$146 million for operating expenses and around US$1.46 billion to repay a bridge loan facility arranged with DBS Bank, which was announced alongside the rights issue.

Another US$657 million was directed towards servicing debt, including the redemption of SIA Group’s 10-year US$365 million fixed-rate notes on 9 July and the repayment of funds previously drawn under certain lines of credit.

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