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Why I'm not buying SIA shares even after Temasek promised to save it

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Why I'm not buying SIA shares even after Temasek promised to save it

Much ink has been spilt on the whole Singapore Airlines Ltd (SGX: C6L) fiasco.

The latest news now is that Temasek, one of the Singapore government's investment arms, has stepped in to provide our country's flag carrier with much-needed capital.

This comes as Singapore Airlines (SIA) is confronting liquidity problems due to its high debt load and fixed costs, and the disruption to its business because of the Covid-19 pandemic.

In essence, Temasek, which currently owns around 55 per cent of SIA, has underwritten a $5.3 billion equity fundraising by the airline.

Temasek has also underwritten a $9.7 billion issuance of mandatory convertible bonds (MCBs) by SIA; the MCBs will either be converted to shares in 10 years or redeemed before then.

What this means is that Temasek will not only subscribe to all the rights and relevant bonds that it's entitled to; it will also purchase any of the rights or bonds that other SIA shareholders do not want.

But despite Temasek coming in to save the day, I'm not interested in investing in SIA, even at these seemingly low prices.

https://www.asiaone.com/money/why-im...omised-save-it

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