Airline Fundraising Hits Record as Coronavirus Brings Travel to Standstill

(Bloomberg) -- Airlines in Asia are tapping the market and existing shareholders for new funds at the fastest pace as the coronavirus pandemic has almost brought international travel to a standstill.

So far this year, regional airlines have announced they will sell a total of $7 billion in new shares to existing shareholders, the most annually on record, data compiled by Bloomberg show. In addition, on Wednesday China Southern Airlines got approval to sell as many as 2.45 billion A-shares in a private placement that could raise as much as $1.7 billion based on its last closing price.

The pandemic has effectively wiped out travel demand this year, causing airlines to ground fleets and slash jobs, with a slow recovery in sight. The International Air Transport Association predicts airlines globally could require as much as $200 billion in government aid and bailout measures this year to survive, while CAPA Centre of Aviation has warned the pandemic will bankrupt most carriers by the end of May if they don’t get support.

Singapore Airlines Ltd. announced a $6.2 billion rights offer in March in what is the largest such deal this year. The carrier is struggling because it doesn’t have a domestic market to fall back on and lost money on fuel hedging. Other airlines to have announced rights offers include Korean Air Lines Ltd and Jejuair Co, for $815 million and $138 million, respectively.

Rights offers across all industries have been pushed to a six-year high by the coronavirus, underscoring the economic damage brought about by the widespread lockdowns. Share sales have also picked up in the last couple of months, as countries from India to China have loosened rules around capital raising to help companies get cash, keeping equity capital markets bankers busy.

UPCOMING LISTINGS:

• Dada Nexus Ltd.
  • Nasdaq exchange
  • Size about $500m
  • Filed May 12
  • Goldman Sachs, Bank of America, Jefferies
• Legend Biotech Corp.
  • Nasdaq exchange
  • Filed May 13
  • Morgan Stanley, JPMorgan, Jefferies
• Burning Rock Biotech Ltd.
  • Nasdaq
  • Size $100m
  • Filed May 22
  • Morgan Stanley, BofA, Cowen & Co., CMBI, Tiger Brokers
• Yeahka Ltd.
  • Hong Kong stock exchange
  • Size $212m
  • Trading June 1
  • CLSA, Nomura, ABC International
• Ebang International Holdings Inc.
  • New York
  • Size $100m
  • Filed April 25
  • AMTD, Loop Capital Markets

More ECM situations we are following:

• Atlas Arteria to raise up to A$495m in equity
• Aditya Birla Fashion to raise up to 10b rupees via rights offer
• Malaysia’s armed forces pension fund is weighing options for its controlling stake in Boustead Holdings Bhd., including taking the group private, people with knowledge of the matter said

See also:

• Asia ECM Weekly Agenda
• IPO data
• U.S. ECM Watch
• EU ECM Watch
• To receive the ECM Watch in your inbox daily, click the “subscribe” button at the top of this article.

©2020 Bloomberg L.P.