Tom Ballantyne

Asia's big profit-maker Singapore Airlines is to end its dual stock exchange listing by merging its local and foreign shares, providing the move doesn't impact Singapore's air service agreements.

Mathew Samuel, the airline's legal and administration director, confirms that SIA is 'actively considering whether or not to merge the two tranches and will decide by end-March, one way or another, whether to continue or not with the dual listings'.

The carrier's hesitation over a dual listing is because most air service agreements with other countries depend on Singapore nationals retaining majority control of SIA.

Singapore nationals currently hold more than 75 per cent of SIA shares, with 53.8 per cent in government hands via state holding company Temasek Holdings. The foreign shareholding limit is set at 27.5 per cent.

However, SIA has long pushed for open skies and the need to do away with local ownership rules to remove aviation restrictions. A single listing could be a step in that direction, opening the way for more foreign shareholders.

But while current bilateral rules exist SIAhas to take care not to lose its status as Singapore's national flag through majority local ownership. SIA's deputy chairman and chief executive, Dr Cheong Choong Kong, says this could be done by using the British Airways/Qantas example. The airlines introduced provisions allowing original owners, British or Australian, to buy shares if majority ownership falls into foreigners' hands and forcing foreign shareholders to sell shares if their collective stake exceeds 49 per cent.

Source: Airline Business