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| Tiger Airways |
Koay Peng Yen, Group CEO of Tiger Airways, said, "We are delighted to receive the green light from the ACCC on this transaction. With this approval in place, we can now look forward to commencing discussions with Virgin on our plans to grow Tiger Australia, and enable it to compete more effectively in the Australia's budget carrier space."
The joint venture will result in a stronger Tiger Australia, allowing it to leverage the strengths of both its shareholders in network planning, operational management, and procurement, with a low cost and internet-based distribution platform. With two strong shareholders, Tiger Australia will be better-positioned to tap opportunities for further expansion in terms of fleet and market reach.
Tiger Airways and Virgin Australia have committed to invest up to a further A$62.5 million collectively into the business to fund growth in Tiger Australia. They have also committed to increasing Tiger Australia's fleet size to 23 by 31 March 2018, with the potential to further increase to 35 aircraft.
Tiger Australia will be managed as a standalone entity, with a separate Board and Management team.
Based on the Group's financial position as at 30 September 2012, Tiger Airways will record a pro forma one-time gain on disposal of about S$120 million. In this regard, pro forma total equity as at 30 September 2012 will increase by about S$128 million to S$344 million, and pro forma NTA will increase by 60% to 41.8 Singapore cents per share. The transaction will also lift the Group's cash position by a further A$35 million.
Tiger Australia will also pay an annual license fee to Tiger Airways for the use of the Tiger brand for 20 years based on a fixed percentage of Tiger Australia's total gross revenue, with options to renew for another two periods of five years each. Tiger Australia has also agreed to make a payment of A$5 million to Tiger Airways, if Tiger Australia achieves certain financial performance targets within five years.
The Group expects the transaction to be completed in the second half of 2013.
Tiger Airways Holdings, established in 2003, is the parent company of a group of budget carriers operating in the Asian region and Australia. The group consists of wholly-owned Tiger Airways Singapore and Tiger Airways Australia, and partially-owned Mandala Airlines and SEAir. Tiger Airways aims to expand its presence in Asia through both new strategic partnerships and organic growth.
As at 31 March 2013, the Group's fleet comprises 43 Airbus A320-family aircraft, averaging under three years of age. The Group operates an extensive network covering over 50 destinations across 13 countries in the Asia Pacific.
Tiger Airways strives to offer warm and friendly service at affordable fares. It is committed to maintaining the highest standards of safety, security and reliability. For more information, please visit www.tigerairways.com.
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