Tiger to raise funds through rights issue
Tiger Airways has announced plans to raise approximately SG$297 million (US$238m) through a rights issue.
The Singapore-based low-cost carrier said the move was intended to “fund future expansion in Asia and strengthen its balance sheet”. Tiger will issue 164.3m new shares at SG$0.47 for each rights share, with shareholders entitled to subscribe for one rights share for every five existing ordinary shares they own in the company. A preferential offering will also entitle shareholders to subscribe for one convertible security worth SG$1.07 for every four shares that they hold.
“The Tiger Group has nearly doubled its capacity in the past four years, and is now flying about 6.5 million passengers annually. We have a strong leadership position in Singapore and have invested in two fast-growing markets, namely Indonesia and the Philippines. The proceeds from the fund raising exercise will allow us to fortify our balance sheet and be well-positioned to grow the Tiger franchise in Asia,” said Koay Peng Yen, Group CEO of Tiger Airways.
Last year Tiger resumed operations of its new Indonesian subsidiary, Mandala Airlines, and sealed its stake in Manila-based SEAir. The group now plans to take delivery of 25 more aircraft over the next three years. As well as funding this expansion, Tiger wants to use the proceeds of the rights issue to reduce its debts.
Singapore Airlines, which is currently Tiger’s major shareholder, will subscribe for an increased number of shares, which could see the group’s stake in Tiger rise from 32.7% at present to as much as 49.9%. The fund-raising exercise is expected to be completed by May 2013.