, Singapore

Scoot's Thai associate enters liquidation

SIA will record a total one-off charge of $123.6m for Q1 following the liquidation.

Singapore Airlines (SIA) has announced that the board of directors of NokScoot Airlines, a 49%-owned associated company of Scoot, passed a resolution to liquidate the Thai-based firm, an SGX filing revealed.

NokScoot’s shareholders will deliberate the same resolution at a general meeting to be held in 14 days. The firm was established in Thailand in 2014 as a joint venture medium- to long-haul low-cost airline by Nok Airlines and Scoot.

In view of the likelihood of the liquidation of NokScoot, SIA will record a total one-off charge of $123.6m for Q1 ending 30 June. This comprises a $106.9m charge mainly due to impairment of SIA’s book value of seven Boeing 777-200 aircraft, which had been leased to NokScoot, and provisions by Scoot of $16.7m to cover its share of liquidation and related costs.

The carrying value of SIA’s investment in NokScoot has been fully written down in previous financial periods.

“Had the one-off charge of $123.6m occurred in the last financial year ended 31 March, it would have had the effect of increasing SIA’s FY2019-2020 loss per share of 17.9 cents by 10.4 cents, representing a 58.1% deterioration, and reducing SIA’s consolidated net tangible assets per share of 7.45 cents as at 31 March by 0.11 cents, representing a 1.5% reduction,” SIA stated.

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