Posted on: 20 October 2014 by Ross McSweeny
In a continuation of its turnaround plan, Tigerair has revealed that Singapore Airlines (SIA) is going to significantly raise its stake in Tigerair Singapore from 40% to around 55% by converting its perpetual convertible capital securities (PCCS) holdings into shares.
Furthermore, Tigerair Singapore is also introducing 1.2 billion new ordinary shares (rights shares) at a discounted rate, to which SIA also plans to subscribe. Each rights share will be sold at S$0.20, representing a 39% reduction of the one-day volume weighted average price (VWAP) of S$0.33 per share on 16 October 2014.
Tigerair Singapore hopes the new rights shares will strengthen the airline’s balance sheet by up to S$234 million. These developments are expected to be completed by January 2015, but the introduction of the new rights shares are still subject to shareholder approval, which will be confirmed at a general meeting in the near future.
Tigerair Group’s CEO, Lee Lik Hsin, remarked, “We are heartened by SIA’s support in this Rights Issue. We are already working closely with Scoot, and look forward to further collaboration with the rest of the SIA Group.”