SIA may land unfamiliar net-debt spot as soon as 2018

A record plane-buying spree is poised to land SIA in an unfamiliar territory. The carrier is expected to turn to a net-debt position as early as 2018 -- for the first time in 13 years -- as the company borrows money and sells bonds to meet capital expenditure needs, analysts say. SIA, which has traditionally limited its debt load, would benefit from raising funds more cheaply through borrowings to improve return ratios and valuations, equity research firms including OCBC Investment Research and Crucial Perspective say. The airline, which has US$53b of aircraft on order, expanded a medium-term note program by two thirds to $5b in April and said it intends to “proactively” take on more debt in future. The carrier’s 5-year average return on equity is below that of Cathay Pacific Airways , according to data compiled by Bloomberg. <br/>