Singapore Airlines *Official* (SGX:C6L)

[5408854088]

so the expected date of commencement of trading of rights shares will be on 8 June, while for rights MCBs will be on 9 June?

 

[arcan3]

After reading up on the rights MCB, one good thing is that there is no need to come up with $4.84 at the end of 10th year to convert the MCB into share. Perhaps, this is an artificial sweetener.


• Number of Shares to be issued upon conversion of Rights MCBs= S$1,806.11 / S$4.84 = 373 Shares (rounded down as fractional entitlements are disregarded)

No additional cash is required from MCB holders upon the mandatory conversion of Rights MCBs into shares.
https://www.singaporeair.com/saar5/pdf/Investor-Relations/Rights-Issue/EGM-Q-and-A-2020.pdf

There is also anti dilution protection inside for MCB. Meaning the conversion cost for MCB will be reduced if there is dividend declared

 

[edwinttt1978]

so the expected date of commencement of trading of rights shares will be on 8 June, while for rights MCBs will be on 9 June?

If by trading you mean selling away the rights and/or MCBs that you don’t want, or buying such, the commencement date is Wednesday, 13 May 2020 from 9.00 a.m and the last date of such trading is Thursday, 21 May 2020 at 5.00 p.m.

 

[edwinttt1978]

There is also anti dilution protection inside for MCB. Meaning the conversion cost for MCB will be reduced if there is dividend declared

Frankly, the whole MCBs affair is beyond me.

 

[Sinkie]

There is also anti dilution protection inside for MCB. Meaning the conversion cost for MCB will be reduced if there is dividend declared

Anti dilution protection?

 

[edwinttt1978]

Anti dilution protection?

Means more dilution?

 

[kakashixx]

Which is why PAP GAHMEN will just give them free gifts in kind to keep them afloat, such as civil servants charter SIA planes, SG Airport group give SIA Airport use benifits, FOC or big discounts etc.

PAP gahmen will basically do everything they can to use government budget and national reserves to do funds transfers etc to keep SIA a float whilst air travel is ravaged by covid-19 and beyond.

from your post, u obviously dont live in singapore n have no idea abt sg aviation market...

 

[edwinttt1978]

Food for thought.

If I have 2000 shares of SIA, say purchased at $10k each, I will be entitled to 6000 rights and 4000 MCBs.
To “salvage” these 2000 shares of SIA (which is now worth $11k and incurring $9k paper loss), I would have to fork up $18k & $4k to “maximise” the deal.

Better to pump in $22k of capital to avoid $9k loss on paper?
Or better to take $22k to invest in something else, with $9k paper loss?
Or better to take out $11k, keep cash and realised $9k loss?

 

[wanker88]

Food for thought.

If I have 2000 shares of SIA, say purchased at $10k each, I will be entitled to 6000 rights and 4000 MCBs.
To “salvage” these 2000 shares of SIA (which is now worth $11k and incurring $9k paper loss), I would have to fork up $18k & $4k to “maximise” the deal.

Better to pump in $22k of capital to avoid $9k loss on paper?
Or better to take $22k to invest in something else, with $9k paper loss?
Or better to take out $11k, keep cash and realised $9k loss?

Question is... Do you expect SIA share price to hit $10? If yes, when?

 

[henrylbh]

Food for thought.

If I have 2000 shares of SIA, say purchased at $10k each, I will be entitled to 6000 rights and 4000 MCBs.
To “salvage” these 2000 shares of SIA (which is now worth $11k and incurring $9k paper loss), I would have to fork up $18k & $4k to “maximise” the deal.

Better to pump in $22k of capital to avoid $9k loss on paper?
Or better to take $22k to invest in something else, with $9k paper loss?
Or better to take out $11k, keep cash and realised $9k loss?

For 2000 SIA shares you will be entitled to 3000 rights Shares and 5900 rights MCB. For the share, the theoretical XR price based on today's closing price of $5.91 would be $4.164 per share.

If you don't subscribe to the rights, the theoretical market value of your 2000 shares would be adjusted downwards to 2000 x 4.164 = $8,328 and you would incur a paper loss of $20,000 - $8,328 = $11,672.

If you subscribe for the 3000 rights shares, your cost will increase to $20,000 + $9,000 = $29,000 for total of 5000 shares. At theoretical XR price of $4.164 per share, your paper loss would be $29,000 - $20,820 = $8,180.

Logically, you must subscribe for the rights share to reduce your paper loss, and how much is the actual loss would depend on the actual XR price.

You have the option to sell the rights shares and the theoretical price would be $4.164 - $3 = $1.164 X 3,000 rights shares = $3,492. This would reduce your cost on original 2000 shares from $20,000 - $3,492 = $16,508. The loss on the remaining original 2000 shares would be $16,508 - $8,328 = $8,180.

You are also entitled to subscribe for 5,900 rights MCB at $5,900. Whether there is a market for the rights MCB is difficult to say. If there is a market for it, you can sell the rights MCB to further reduce you cost, if you think the MCB is not worth subscribing for.

You can also try to apply for excess rights share to reduce your cost further.

The final result of the above calculations would all depend on the actual price instead of the theoretical price as market is not logical.

 

[yoyokid]

Thanks

Question is... Do you expect SIA share price to hit $10? If yes, when?

The short answer is "tan ku ku"... literally... Lol...

 

[arctician]

the only opportunity here is to apply for excess, for those existing holder just max out the excess, for new shareholder just buy in 100 or 200 shares then activate your option to buy more...since its 3 shares for every 2 existing, i think there may be chances of allotment

 

[arcan3]

Frankly, the whole MCBs affair is beyond me.

Anti dilution protection?

Means more dilution?

Meaning if there are any stock split, dividend or bonus issue, the value of the MCB will be protected by adjusting conversion price accordingly

 

[Sinkie]

For 2000 SIA shares you will be entitled to 3000 rights Shares and 5900 rights MCB. For the share, the theoretical XR price based on today's closing price of $5.91 would be $4.164 per share.

If you don't subscribe to the rights, the theoretical market value of your 2000 shares would be adjusted downwards to 2000 x 4.164 = $8,328 and you would incur a paper loss of $20,000 - $8,328 = $11,672.

If you subscribe for the 3000 rights shares, your cost will increase to $20,000 + $9,000 = $29,000 for total of 5000 shares. At theoretical XR price of $4.164 per share, your paper loss would be $29,000 - $20,820 = $8,180.

Logically, you must subscribe for the rights share to reduce your paper loss, and how much is the actual loss would depend on the actual XR price.

You have the option to sell the rights shares and the theoretical price would be $4.164 - $3 = $1.164 X 3,000 rights shares = $3,492. This would reduce your cost on original 2000 shares from $20,000 - $3,492 = $16,508. The loss on the remaining original 2000 shares would be $16,508 - $8,328 = $8,180.

You are also entitled to subscribe for 5,900 rights MCB at $5,900. Whether there is a market for the rights MCB is difficult to say. If there is a market for it, you can sell the rights MCB to further reduce you cost, if you think the MCB is not worth subscribing for.

You can also try to apply for excess rights share to reduce your cost further.

The final result of the above calculations would all depend on the actual price instead of the theoretical price as market is not logical.

If you have no intention to subscribe to the rights, then please sell your rights to recoup some of your capital, your rights are still worth some money $3,492.

If you don't subscribe to the rights, the market value of your 2000 shares will be 2000 x 4.164 = $8,328 and you would incur a paper loss of $20,000 - $8,328 = $11,672 ( if you choose to let your rights to expire to worthless)

And because you sold the rights shares, you will get back $3,492 in cash

This would reduce your cost on original 2000 shares from $20,000 - $3,492 = $16,508. The loss on the remaining original 2000 shares would be $16,508 - $8,328 = $8,180.

There is no “Logically, you must subscribe for the rights share to reduce your paper loss.”

 

[Sinkie]

Meaning if there are any stock split, dividend or bonus issue, the value of the MCB will be protected by changing of conversion price

Yes, it means nothing

If mother share stock split, the $4.84 will also be split etc

If mother share declare $0.10 dividend, your $4.84 become $4.74, you get more shares back after 10 years

 

[hwbest]

TERF does need to include the free MCBs right?

Absolutely correct!

To elaborate,
TERF
= [(Old shares x Prevailing Price) + (New Shares x Issue Price] / (Old Shares + New Shares)
= [(2 x $5.91) + (3 x $3)] / (2 shares + 3 shares)
= [$11.82 + $9] / 5 shares
= $4.164

The lazy way of calculation is 4% off.

 

[henrylbh]

Yes, it means nothing

If mother share stock split, the $4.84 will also be split etc

If mother share declare $0.10 dividend, your $4.84 become $4.74, you get more shares back after 10 years

Yes the conversion price of mcb has full dividend etc protection. But I couldn't find doc to show the calculation and I won't assume it is so simple as you make it to be. SIA has been paying dividends every single year. Like that the conversion price may be even lower than the current rights share

 

[reddevil0728]

Yes the conversion price of mcb has full dividend etc protection. But I couldn't find doc to show the calculation and I won't assume it is so simple as you make it to be. SIA has been paying dividends every single year. Like that the conversion price may be even lower than the current rights share

paying every single year PRIOR to COVID-19...

 

[Sinkie]

Yes the conversion price of mcb has full dividend etc protection. But I couldn't find doc to show the calculation and I won't assume it is so simple as you make it to be. SIA has been paying dividends every single year. Like that the conversion price may be even lower than the current rights share

And yes it is so simple

 

[edwinttt1978]

TERF does need to include the free MCBs right?

Theoretically, yes.