Tiger Airways raises funds for PH, Indonesia expansion

Lean Santos

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Budget carrier Tiger Airways plans to raise $297 million for expansion plans in Indonesia and the Philippines

REGIONAL EXPANSION. Tiger Airways plans to raise $297-M to finance its plans for regional expansion. Photo from AFP

MANILA, Philippines – Tiger Airways Holding Ltd, parent company of budget carrier Tiger Airways, plans to raise $297 million to fund plans for future Asian expansion, specifically in Indonesia and the Philippines. 

In a company disclosure released on March 4, the airline said that the amount will be raised through rights issue and convertible securities with an estimated gross proceeds of $77.2 million and $219.8 million, respectively.

The amount will be used for expansion plans, debt payment and fortifying its financial position, the disclosure noted.

The budget carrier mentioned its increased operations in the past 4 years on top of its investments in Indonesia and the Philippines as main reason for the company’s plans for expansion.

“The Tiger Group has nearly doubled its capacity in the past 4 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,” Koay Peng Yen, CEO of Tiger Airways, said.

As part of the expansion plans, Tiger Airways Holding Ltd is expecting an additional 25 aircraft to beef up its fleet by September 2015, more than half of its existing fleet of 43 by its subsidiary and associated airlines.

The fund-raising activity is expected to be completed by May 2013 with the shareholder’s approval expected to be given in an extraordinary general meeting on March 22.

In August 2012, the Tiger Group completed the purchase of a 40% stake in SEAir, the country’s 5th-tier airline in an industry of 6 for $7 million. SEAir currently houses two A319s and three A320s in its fleet.

The acquisition of SEAir is the Tiger Group’s second joint venture as part of its plans for regional expansion. In 2012, the group also acquired a 33% stake in Mandala Airlines in Indonesia. – Rappler.com

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