The carrier has also obtained a S$4 billion bridge loan facility with the country's biggest lender,

DBS Group Holdings Ltd, to support near-term liquidity needs until the airline secures money
from the rights issue.

SIA has said it would cut capacity by 96%, ground almost its entire fleet and impose cost cuts
affecting about 10,000 staff amid what it called the "greatest challenge" it had ever faced.

The rights issue will be offered at S$3 per share, a 53.8% discount to SIA's last traded price of
S$6.5.

"While the raising looks earnings and valuation decretive, SIA now looks well positioned to ride
out the storm with balance sheet concerns largely de-risked," BofA analysts told clients.<b ..

he rights issue will be offered at S$3 per share, a 53.8% discount to SIA's last traded price of
S$6.5.

"While the raising looks earnings and valuation decretive, SIA now looks well positioned to ride
out the storm with balance sheet concerns largely de-risked," BofA analysts told clients.

Temasek International Chief Executive Dilhan Pillay Sandrasegara said the deal would not only
tide SIA over a short-term liquidity challenge but would position it for growth beyond the
pandem ..

(The MRO says the pace of recovery is unclear “but is expected to be slow”. Recovery will
depend on how soon traffic returns, especially to its main base at Singapore’s Changi Airport.
“While regulated mandatory aircraft checks are still ongoing, the reduction in flying hours and
subsequent extended maintenance intervals will have an impact, albeit delayed, on our base
maintenance unit and our [engine and component] joint ventures,” SIAEC adds.
It stressed that its balance sheet remains healthy, with a strong cash position and minimal debt.)-
https://www.flightglobal.com/aerospace/post-pandemic-mro-recovery-unclear-
siaec/138293.article
Financial Strategies
Before the pandemic, SIA had the one of the healthiest financial environments not only in the
world’s aviation/airlines industry but also in its origin country.  But as like other airline
companies, SIA-world’s top carriers could not evade the biggest financial crisis in the industry’s
history after the pandemic eviscerated air travel. The carrier obtained a S$4 billion bridge loan
facility with the country's biggest lender, DBS Group Holdings Ltd, to support near-term
liquidity needs until the airline secures money from the rights issue.
The authority decided that it would cut capacity by 96%, ground almost its entire fleet and
impose cost cuts affecting about 10,000 staff amid what it called the "greatest challenge" it had
ever faced.
The rights issue will be offered at S$3 per share, a 53.8% discount to SIA's last traded price of
S$6.5."While the raising looks earnings and valuation decretive, SIA now looks well positioned
to ride out the storm with balance sheet concerns largely de-risked," BofA analysts told clients.
Temasek International Chief Executive Dilhan Pillay Sandrasegara said the deal would not only
tide SIA over a short-term liquidity challenge but would position it for growth beyond the
pandemic .The International Air Transport Association doesn’t expect passenger traffic to
recover to pre-pandemic levels until 2024. Singapore Airlines is particularly vulnerable because
it has no domestic market to fall back on.
So. for tackling this situation and to comply with the ICAO’s and local government’s
instructions mainly two financial strategies can be undertaken:
1.Managing Liquidity and Cash requirements
2.Managing the Rights issue
1. Managing Liquidity and Cash requirements: Following steps can be taken to manage the
liquidity and cash requirements:
 decisive capacity cuts across the network in response to deterioration in global air
travel demand
 cuts in management salaries and directors’ fees, voluntary and compulsory no-pay
leave while protecting jobs, recruitment freeze
 deferred non-essential expenditure projects & imposed tight controls on
discretionary expenditure
 engagement with aircraft manufacturers to negotiate adjustments to delivery
streams for existing aircraft orders

Moreover, some strategies can be taken for improving Liquidity Steps to Improve Liquidity
 tapped on lines of credit maintained for contingency situations
  exploring other sources of funding, including secured financing and sale-and-
leaseback transactions, although opportunities remain limited in current market
conditions

2. Managing the Rights issue- raising capital through the issuance of Rights Shares and
Rights MCBs:
For keeping the strategic priorities intact while addressing Near-Term Liquidity Requirements,
right issue can be taken as strategies. It can be of two types-
a) Building Liquidity and Strengthening Balance Sheet:
 the Rights Issue will bolster equity in the balance sheet
 treating capital raised as equity strengthens balance sheet for the future
 additional $6.2B through Additional Mandatory Convertible Bonds (MCB) to
provide the Group with additional liquidity if crisis prolongs and to be tapped
only if necessary

b) Financial Flexibility to Capture Future Growth Opportunities:

 address near-term operational & cashflow requirements while providing for
committed capital expenditure
 positions for quick response in ramp up once borders open
 strategic priorities continue to be in focus