- The Board of Singapore Airlines has resolved to
recommend a cash distribution of $2,162 million to shareholders, by
way of a special dividend of 50 cents per share, and a return of
capital through the cancellation of one share for every 15 shares
held, at $18.46 per share cancelled.
Following a regular review of the Group's capital structure,
Singapore Airlines believes there is scope to distribute surplus
capital to shareholders. Combined with the final dividend of 35
cents per share, the total distribution to shareholders will be $2.08
Singapore Airlines Chief Executive Officer, Chew Choon Seng, said
the capital reduction and distribution to shareholders was opportune,
given the Company's strong financial position.
"We have unlocked capital from non-core assets in line with the
Company's approach to focus on its core business, and are now
returning some of these funds back to shareholders," Mr Chew said.
"This distribution will help us achieve a more efficient capital
structure while maintaining financial flexibility. The Group's
future earnings per share and return on equity will also be enhanced.
"We have opted to achieve the capital reduction through the
cancellation of shares so that all shareholders will benefit from the
distribution of capital, and their proportion of ownership will be
unchanged after the exercise".
The first component of the proposed distribution will involve a
special dividend of 50 cents per share, at a cost of $625 million.
Subject to all necessary approvals, this special dividend will be
paid on 17 August 2007: the same date as the payment of the dividend
recommended arising from the Group's 2006-07 results.
The second component will involve a cash distribution of $1,537
million by cancelling one for every 15 of the Company's issued
shares. This means shareholders would have one share cancelled for
every 15 shares they own at the date of the closure of books, subject
to rounding up to the nearest multiple of 10 shares.
The Board is recommending a cash distribution to shareholders of
$18.46 per share cancelled. This price is based on the average of
the closing prices of Singapore Airlines shares traded on the
Singapore Exchange for the period 2 May to 8 May 2007 inclusive.
Based on the 1,249 million Singapore Airlines shares currently in
issue, the proposal would involve the cancellation of approximately
83 million shares, and the reduction of the Company's issued share
capital by approximately 6.7%.
The Company intends to apply to the Singapore Exchange for the
creation of a temporary odd-lot trading counter to allow investors to
trade in lots of ten shares, following the capital reduction
exercise. It is expected the odd-lot trading counter, if approved by
the Singapore Exchange, will be available for up to 30 days.
In what is believed to be a first for such an exercise in
Singapore, Singapore Airlines will also provide an option to allow
shareholders with odd lots following the cancellation of shares to
top up to a normal board lot of 200 shares by subscribing for top up
shares at the same price as the cash distribution for cancelled
shares. The cost of top up shares would be offset against the cash
distribution to the shareholder, and the shareholder would not have
to make any additional cash outlay.
The capital reduction and top up offer are subject to approval by
shareholders at an Extraordinary General Meeting of the Company, to
be held in conjunction with the Company's Annual General Meeting, on
31 July 2007. The capital reduction would thereafter be subject to
approval by the High Court.
The cash distribution is expected to increase the Return on Equity
("ROE") of the Group for the year ended 31 March 2007, on a pro forma
basis, from 14.9% to 17.6%, and also increase earnings per share from
172.6 cents to 185.1 cents.
More details of the proposed capital reduction exercise and top-up
offer can be found in the Announcement to the Singapore Exchange on
Proposed Cash Distribution By Way of Special Dividend and Capital
Reduction ("Announcement"), which is available on the Singapore
Exchange website under Company Announcements, or on the Singapore
Airlines website, under Investor Relations. A Frequently Asked
Questions sheet ("FAQ") is also available on the Singapore Airlines
ots Originaltext: Singapore Airlines
Public Affairs Department
Tel.: +41/44/218'61'40 (office hours)