Tiger Airways Holdings Ltd. (TGR), the budget airline partly owned by Singapore Airlines Ltd. (SIA), plans to raise S$293.5 million ($236 million) to help fund its operations in Indonesia and the Philippines as well as to repay debt.
Tiger Air will sell 164.3 million new shares at 47 Singapore cents each, 34 percent discount to yesterday’s closing price, according to a statement to the Singapore stock exchange. It will also offer shareholders convertible bonds for every four shares they own, the carrier said.
“The proceeds from the fundraising exercise will allow us to fortify our balance sheet and be well-positioned to grow the Tiger franchise in Asia,” the carrier’s Chief Executive Officer Koay Peng Yen said in the statement.
Tiger Air shares fell as much as 2.1 percent to 70 Singapore cents, the most since Dec. 6, and changed hands at 70.5 Singapore cents as of 9:45 a.m. in the city. The stock has dropped 2.1 percent this year, compared with a 2.4 percent rise in the benchmark Straits Times Index.
Shareholders Singapore Airlines and Temasek Holdings Pte- owned Dahlia Investments Pte will subscribe to the offerings, Tiger Air said. The fund raising comes as budget airlines in Asia are expanding their network to meet the surge in travel demand.
Singapore Air, which owns 32.7 percent of Tiger, will buy additional shares and bonds if they aren’t taken up by other shareholders, as long as its holding doesn’t exceed 49.9 percent, Tiger Air said. Dahlia holds 7.3 percent of the budget airline.
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