Best Crisis Management Solution Winner: Singapore Airlines Limited

Published: Feb 2022


Photo of Balagopal Kunduvara, Divisional VP, Davy Lee, VP Treasury, Jason Pow, Manager Middle Office and Projects, Joanne Lee, Manager Treasury, Lauren Chan, Manager Investor Relations and Miranda Tham, Manager Corporate Finance.

Balagopal Kunduvara

Divisional VP, Financial Services

Singapore Airlines is the flag carrier airline of Singapore with its hub at Singapore Changi Airport. Together with its subsidiaries, the SIA Group provides passenger and cargo air transportation services under the Singapore Airlines and Scoot brands globally. Other principal activities include engineering services, training of pilots, air charters, as well as tour wholesaling and related activities.

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Singapore Airlines’ rights issuance proceeds despite circuit breaker lockdown

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The challenge

Singapore Airlines (SIA) undertook a Rights Issue in May 2020 before the Singapore government imposed a circuit breaker lockdown arising from the unprecedented COVID-19 pandemic. The Rights Issue was critical for the SIA Group to raise sufficient capital to continue funding its operations and commitments during the worldwide pandemic which severely affected the aviation industry and the Group’s business.

The conventional modes of subscription are either submission of a hard copy form to the Central Depository (CDP) or application via automated teller machines (ATMs) from the three Singapore banks – DBS (including POSB), OCBC and UOB. There was no other digital option available to customers to subscribe via the internet banking platform. As the Rights Issue was in the midst of the circuit-breaker period which saw untraced transmission within the community, the key concern was whether shareholders could be exposed to the risk of contracting the virus while queuing up at the ATMs to subscribe for the Rights Issue.

With the safety of subscribers’ paramount, it was critical to develop and provide a contactless alternative mode of subscription within a month to be ready for roll-out before the start of the Rights Issue in May.

The solution

SIA’s financial adviser for the Rights Issue, DBS, harnessed its digital capabilities expeditiously and stepped in to design a contactless collection workflow to address the company’s requirement to enable subscribers to subscribe for the Rights Issue without having to step out of their homes.

The solution consisted of an online application website built by SIA with SIA’s unique entity number (UEN) provided to subscribers to enable them to make payments using PayNow UEN.

Subscribers simply authorised their banks via personal mobile app or personal internet banking to transfer funds for the purpose of their share subscriptions in the comfort and safety of their homes.

In addition to collection of share subscriptions, DBS also facilitated reconciliation. Through host-to-host (H2H) connectivity, the bank would send a collection report to SIA where applications and payments received were matched. SIA would send a report on both successful and unsuccessful applications to the bank where it would refund any monies to unsuccessful applicants. Post the subscriptions, the bank also refunded any excess subscriptions directly into the accounts of the applicants.

Best practice and innovation

DBS was well-prepared to help SIA weather the COVID-19 storm with its digital leadership. With a deep understanding of subscription workflow, the bank designed a digital solution that enabled subscription in a contactless manner within a tight timeline of just one month.

“The digital rights issuance solution is also a market first in Singapore, enabling us to efficiently carry out our Rights Issue to raise capital despite the tighter measures during the circuit breaker period,” explains Balagopal Kunduvara, Divisional VP, Financial Services.

Key benefits

  • The solution was well received with 50% of the retail subscribers adopting the contactless route for the subscription.
  • Against the backdrop of pandemic and circuit breaker lockdown, this contactless means of subscription helped SIA raise the necessary funding for its operations and commitments and, at the same time, taking into consideration the safety of the subscribers.

Wong Pei Pei

Executive Director, Team Lead of Sales, Global Transaction Services

DBS put together a multi-disciplined team last year to support SIA’s rights issue during the circuit-breaker period arising from the unprecedented pandemic. Being cognisant that the success of the rights issue was highly dependent on the subscription level and that the safety of shareholders is of paramount importance, DBS and SIA worked closely together under a compressed timeframe to incorporate a first-to-market digital solution to enable rights subscription and settlement in a contactless manner. The contactless subscription, payment and settlement workflow was well received with 50% of the shareholders adopting the contactless route. This is made possible with the digital maturity of DBS to leverage technology and very rapidly execute new connectivity with SIA, and SIA’s quick response and actions to safely add new functionality onto its corporate website.

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The Adam Smith Awards Asia is the industry benchmark for best practice and innovation in corporate treasury. The 2021 awards attracted a record-breaking 497 nominations. To find out more please visit treasurytoday.com/adam-smith-awards-asia

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