Singapore Airlines: A Rights Issue during the COVID-19 Crisis

In early 2020, Singapore Airlines Limited (Singapore Airlines) faced severe liquidity issues as the global pandemic halted its flights and uncertainty loomed. Erstwhile massive cash reserves were quickly running out, and the airline’s executives pondered how to save the company from insolvency. Singapore Airlines’ majority shareholder, Temasek Holdings Limited, agreed to subscribe to a massive capital-raising exercise of up to S$15 billion via a proposed rights offer and mandatory convertible bonds (MCBs). Although minority shareholders were not convinced that the rights issue would be a good investment in such uncertain times, they had to decide whether to vote for it and whether to subscribe to the rights issue and MCBs.