Tiger Airways

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#11
The company asking for money again, the last round was slightly more than a year ago.

http://info.sgx.com/webcoranncatth.nsf/V...4003FE12B/$file/20130304_Tiger_Airways_To_Raise_SGD297M_PR_Final.pdf?openelement

This round the right issue priced as $0.47, with almost similar discount as last round IIRC

The reasons are
- Repayment of existing loans
- Funding / investment in new or existing airlines and/or ventures
- Funding for aircraft, spare engines & other aircraft parts, and assoc. pre-delivery payments
- Working capital and issuance expense
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#12
Ah well, airlines always suck a lot of money. Last rights issue was in late-2011. That's about 18 months or so.

The Straits Times
www.straitstimes.com
Published on Mar 06, 2013
Tiger seeks $294m from shareholders

Proceeds will pay off debts, expand budget carrier's presence in Asia

By Karamjit Kaur Aviation Correspondent

BUDGET carrier Tiger Airways plans to raise $293.5 million in net proceeds from shareholders to pay its debts and fund expansion.

The money will be used to buy aircraft and parts, among other expenses, to support its Asian operations, the airline said yesterday.

Singapore-based Tiger Airways Holdings owns two carriers, one in Singapore and the other in Australia. It also has stakes in Indonesia's Mandala Airlines and South East Asian Airlines in the Philippines.

In the last four years, Tiger Airways has nearly doubled its capacity and now flies about 6.5 million passengers annually, said group chief executive Koay Peng Yen.

He said: "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."

To raise the money it needs, Tiger will give existing shareholders an opportunity to take up more stock at a discounted price.

They can buy one rights share for every five shares held.

The offer is 47 cents for each share - a discount of about 34 per cent from the last traded price on Monday.

In a fairly rare move, the group is also offering stakeholders the option to take up convertible securities - $1.07 each for every four ordinary shares that they hold.

These can be converted to shares in future. In the meantime, owners will earn a 2 per cent return a year for five years.

The rights issue is expected to raise $77.2 million while the convertible bond issue is set to raise $219.8 million in net proceeds.

Mr Hugh Young, managing director of Aberdeen Asset Management Asia, said offering convertible securities allows Tiger to raise cash at a lower cost, than taking up a loan, for example.

He said: "If the share price goes up and people convert their securities to shares, it also immediately becomes equity rather than debt."

Issuing shares and convertible securities also means less dilution for existing stakeholders, analysts said.

The last time Tiger Airways sought cash from the market was in August 2011 when it announced a rights issue to raise $159 million.

Its current fund-raising plans will be put to shareholders for their approval later this month.

The airline, about a third owned by Singapore Airlines, currently operates a fleet of 43 single-aisle Airbus aircraft. By September 2015, the group will take delivery of another 25 jets.

With the demand for low-cost travel in the Asia-Pacific outpacing growth in the full-service sector, carriers like Tiger Airways, Jetstar and AirAsia are ramping up capacity. But with yields under pressure from high oil prices and competition, profits are being hit.

In the three months to Dec 31, Tiger Airways made a small $2 million profit. While this reversed a $17.4 million loss in the same quarter in 2011, the outlook remains challenging, analysts said.

karam@sph.com.sg
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#13
can someone tell me what to do
subscribe to rights and/or pccs?

i dunno much about pccs. die
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#14
anyone attending the meeting tomorrow?
i duno whether to subscribe to pccs anot. pls help, someone Sad
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#15
my suggestion is dont touch the listed airlines, most of them do not have a franchise as strong as it seems.. buffett almost lost all his capital in a well managed airline
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#16
Maybe he should repeat why airlines in general need massive amounts of cash injections every now and then, I didn't hear clearly the first time.....

The Straits Times
www.straitstimes.com
Published on Mar 23, 2013
Tiger Airways to raise $297m

Funds will be used to further its expansion plans in the region

By Karamjit Kaur Aviation Correspondent

SHAREHOLDERS might wonder why Tiger Airways needs more money, barely 18 months after its last fund-raising exercise.

The question would be valid, said group chairman J.Y. Pillay.

Addressing stakeholders at an extraordinary general meeting to seek approval for plans to raise nearly $300 million, Mr Pillay noted that the airline last raised cash in September 2011. That was about 20 months after it went public.

Mr Pillay said: "Shareholders are entitled to ask why we are again seeking to raise funds... What happened to the $158.4 million that we raised earlier?"

The six-week suspension of Tiger Airways Australia in July 2011 dealt the group a big blow, he said.

When the flying ban, imposed over safety concerns, was lifted, the airline had to face restrictions such as a drastic cut in the number of flights it could operate.

Normal services resumed only at the end of last year - 18 months after the suspension.

Mr Pillay said: "You might well imagine that the rehabilitation process took a toll, principally in terms of the heavy losses sustained."

The ban also damaged the group's reputation, he said, adding that the recovery process, to some extent, distracted management from other important tasks.

Moreover, the group incurred costs to support its expansion plans, he said.

Last year, Tiger Airways acquired stakes in Indonesia's Mandala Airlines as well as South East Asian Airlines in the Philippines.

Both carriers have seen losses and will take some time to turn the corner, but the investment is important for Tiger's future, said Mr Pillay.

He noted: "Indonesia and the Philippines are the two largest countries in Asean, where we believe our destiny lies.

"We have to expand beyond the shores of Singapore in order to safeguard the future of the Tiger Group."

Moving forward, the group, which owns Tiger Airways Australia, also hopes to get regulatory approval Down Under to sell a 60 per cent stake to Virgin Australia.

The matter is still pending.

The $297 million that Tiger Airways hopes to raise this round will be used to buy the aircraft and equipment that it needs for expansion, and to support the two new "cubs", said Mr Pillay.

Shareholders yesterday gave their unanimous support for Tiger's plans to offer new shares to existing stakeholders and issue what are called convertible securities, which can be converted to normal shares in the future.

karam@sph.com.sg
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#17
Raise money to fund cheapskate traveller like me?
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#18
Does Tiger Airways as a LCC with Singapore as its main hub have a future?

The answer has to be "Yes", especially so with SQ/Temasek as its sponsors, but the path ahead will definitely be a bumpy ride, so shareholders better buckled up and expect the usual up and down caused by air turbulence. It simply means there is no guarantee that shareholders/investors will make money here even in the medium to longer term, as the business will suffer occasional major cash burns and require massive capex to build up its capacity and regional network over the next 5 years.
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#19
I did a simple comparison between Tiger and Airasia last time. The cost to run LCC in Singapore is really too high. maybe that's one of the reason why it is difficult for Tiger to be profitable, but Airasia is a much more successful & profitable LCC in the region.
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#20
Might be useful article of LCCs in ASEAN.

Who will rule ASEAN skies?

Barely three years away from the planned ASEAN (Association of South-east Asian Nations) Open Skies agreement to be implemented in 2015, some airlines are already positioning themselves for that eventuality even as the road leading there is not completely clear of obstacles.

The proposal, initiated in 1996, means airlines of the 10-member countries will enjoy free access within ASEAN’s single aviation market.

It is tempting to compare the ASEAN situation with that of the European Union (EU). But unlike EU, ASEAN does not have a central judiciary system that oversees the Open Skies implementation. ASEAN works by consensus among all its members, so road bumps can be expected.

Indonesia — which is the bloc’s largest market — is likely to be where the competition will be most intense.

http://www.todayonline.com/commentary/wh...ies#inside
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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