- We are positive towards SIA’s planned merger of Vistara into Air India, which will allow SIA to strengthen its presence in the fast-growing Indian market via its 25.1% strategic stake in a stronger Air India (the surviving entity).
- - Read this at SGinvestors.io -
- Maintain HOLD on SIA, with a slightly higher target price of S$5.35, based on 1.06x FY24F P/B.
Merging Vistara into Air India.
- - Read this at SGinvestors.io -
- Post the transaction, SIA will own a 25.1% stake in an enlarged Air India Group. Besides the initial investment, SIA is also committed to make further capital injection of up to S$880m (being SIA’s share of amount based on the 25.1% stake), payable only after the merger completion and subject to Air India’s requirement.
- Financing by internal cash. With a significant cash pile of S$17.5b as of end-1HFY23, SIA plans to finance the initial cash investment (S$360m) and the subsequent additional capital injection (if any) with its internal cash resources.
- SIA and Tata expect the merger deal to be completed by Mar 24 (i.e. end of FY24), subject to a number of regulatory approvals such as anti-trust and merger control approvals in India, Singapore and other relevant jurisdictions, the approval of the Indian Civil Aviation Authority etc.
Recap on Vistara.
- Read more at SGinvestors.io.
Above is the excerpt from report by UOB Kay Hian Research.
Clients of UOB Kay Hian may be the first to access the full report in PDF @ https://www.utrade.com.sg/.
Roy Chen CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2022-12-01
Read also UOB's most recent report:
2024-03-19 SIA's Feb 24 Operation Data - Both Pax & Cargo Data Better Than Expected.
Previous report by UOB:
2024-02-22 Singapore Airlines - 3QFY24 Results Miss Mainly On Cost Pressure.
Price targets by 4 other brokers at SIA Target Prices.
Listing of research reports at SIA Analyst Reports.
Relevant links:
SIA Share Price History,
SIA Announcements,
SIA Dividends & Corporate Actions,
SIA News Articles
