Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

ASEAN Reopening: Tourism and Transport Reboot

ASEAN Reopening: Tourism and Transport Reboot - Part Deux

Singapore Air Rights - The Circular Is Out And the MCBs Are Still Ugly

Singapore Air Rights and Rights MCBs - The MCBs Are Odder Than You Think

Singapore Air - The Rights Distribution - Vol Is Your Friend

Singapore Air - If You Are Long, Use the Rights

Quiddity Advisors

Equity Bottom-Up

Just over a year ago, nearer the start of the impact of covid-19 on the global airline industry, Singapore Airlines also known as "<a href="https://www.smartkarma.com/entities/singapore-airlines-ltd" target="_blank" data-smartkarma-citation="entities:74:1" rel="noopener">SIA (SIA SP)</a>" announced a pair of rights offerings meant to shore up its capital base, and to allow it to survive through the pandemic. The rights offerings required a Circular, and a shareholder meeting to approve them, then Singapore Air raised S$5.3bn in New Shares and S$3.5bn in Mandatory Convertible Bonds (MCBs). The shareholder meeting of summer 2020 also allowed for Singapore Air to raise up to S$6.2bn of Additional Rights MCBs within 15 months of the original shareholder meeting. Last week on Wednesday night, Singapore Air <a href="https://links.sgx.com/FileOpen/Launch%20Announcement%202021.ashx?App=Announcement&amp;FileID=667006" target="_blank" rel="noopener">announced</a> the launch of a renounceable rights offering for S$6.2bn of Mandatory Convertible Bonds, following on from last year. The <a href="https://links.sgx.com/FileOpen/Notice%20of%20Record%20Date%20.ashx?App=Announcement&amp;FileID=667008" target="_blank" rel="noopener">record date</a> will be 28 May 2021.The company also announced <a href="https://links.sgx.com/FileOpen/slide-q4fy2021.ashx?App=Announcement&amp;FileID=667066" target="_blank" rel="noopener">results</a>, with a full-year net loss of S$4.3bn after passenger traffic is down 97.9%, including S$1.953bn in impairment charges. Non-fuel expenditures dropped by more than half, but that was still not enough to overcome the severe drop in flight mile revenues (-76.1%; -94.7% for passenger flights)), despite a significant increase (+38.8%yoy) in cargo revenues.The company ended the year with S$7.8bn in cash and bank balances against S$14.3bn of debt. NAV per share was S$5.36/share vs S$7.86 a year earlier on 31 March 2020.None of this should be a surprise. That Singapore Airlines had raised S$15.4bn since April 2020 (S$8.8bn in rights issues, S$2.1bn in secured financing, S$2.5bn in convertible bonds ($850mm 1.625% in Dec 2020), notes, and credit lines, S$2.1bn of secured financing against aircraft, and earlier this month a S$2.0bn sale and leaseback of 11 aircraft), lost S$2.5bn this year on an operating basis, and in February the company <a href="https://links.sgx.com/FileOpen/NE-0621%20.ashx?App=Announcement&amp;FileID=647770" target="_blank" rel="noopener">deferred S$4bn</a>of aircraft delivery over the next four fiscal years) and lowered non-fuel expenditures by S$5bn annually should be a positive outcome.But another S$6.2bn of MCBs is not bullish. Just as the first S$8.8bn was not bullish last year. More below the fold.

Just over a year ago, nearer the start of the impact of covid-19 on the global airline industry, Singapore Airlines also known as "SIA (SIA SP)" announced a pair of rights offerings meant to shore up its capital base, and to allow it to survive through the pandemic. The rights offerings required a Circular, and a shareholder meeting to approve them, then Singapore Air raised S$5.3bn in New Shares and S$3.5bn in Mandatory Convertible Bonds (MCBs). The shareholder meeting of summer 2020 also allowed for Singapore Air to raise up to S$6.2bn of Additional Rights MCBs within 15 months of the original shareholder meeting. Last week on Wednesday night, Singapore Air announced the launch of a renounceable rights offering for S$6.2bn of Mandatory Convertible Bonds, following on from last year. The record date will be 28 May 2021.The company also announced results, with a full-year net loss of S$4.3bn after passenger traffic is down 97.9%, including S$1.953bn in impairment charges. Non-fuel expenditures dropped by more than half, but that was still not enough to overcome the severe drop in flight mile revenues (-76.1%; -94.7% for passenger flights)), despite a significant increase (+38.8%yoy) in cargo revenues.The company ended the year with S$7.8bn in cash and bank balances against S$14.3bn of debt. NAV per share was S$5.36/share vs S$7.86 a year earlier on 31 March 2020.None of this should be a surprise. That Singapore Airlines had raised S$15.4bn since April 2020 (S$8.8bn in rights issues, S$2.1bn in secured financing, S$2.5bn in convertible bonds ($850mm 1.625% in Dec 2020), notes, and credit lines, S$2.1bn of secured financing against aircraft, and earlier this month a S$2.0bn sale and leaseback of 11 aircraft), lost S$2.5bn this year on an operating basis, and in February the company deferred S$4bnof aircraft delivery over the next four fiscal years) and lowered non-fuel expenditures by S$5bn annually should be a positive outcome.But another S$6.2bn of MCBs is not bullish. Just as the first S$8.8bn was not bullish last year. More below the fold. 

Singapore Air Rights MCBs - S$6.2bn of Capital Suck