Could be nearly 10 times over-subscribed. Bet Mr Buchanan's happy.
Tiger eyes growth as share offer takes off
TIGER Airways has priced its initial public offering at $S1.50 ($1.17) a share and the deal appears to have been fully or oversubscribed. Reports from Singapore yesterday indicated the partial float had attracted strong interest despite doubts among analysts about the airline's financial performance.
The response came after Tiger indicated it wanted to sell the shares at the top end of its $S1.35 to $S1.65 indicative range and would realise about $S233 million before expenses.
The airline plans to use more than half of the money to fund aircraft acquisitions, with about $S50m going to pay down short-term loans and a further $S10m going to fund "potential new airlines or operating bases".
Tiger currently has bases in Singapore, Melbourne and Adelaide serviced by 17 aircraft and plans to add a further 51 by 2015, setting it up as a major competitor to Jetstar and AirAsia.
The offering consisted of 155,556,000 new shares plus 9,599,000 from investor Indigo Partners, but the Financial Times reported yesterday that the IPO had been 3 1/2 times subscribed by Friday night and it could end up eight to 10 times oversubscribed.
This would trigger a clause that would see further shares sold by RyanAsia, an investment vehicle controlled by Ireland's Ryan family.
Industry insiders said the strong retail response was likely linked to a decision by Singapore Airlines and the Singapore government's investment arm Temasek to remain in the airline as major shareholders.
The Tiger result came as Singapore Airlines reported it filled more seats on its aircraft in December but that passenger numbers were still 4.7 per cent down on last year.
Singapore's passenger load factor rose 4.4 points to 84.3 per cent after a 9.2 per cent fall in capacity outpaced a 4.3 per cent drop in traffic.
December load factors on routes to the southwest Pacific were flat at 89.7 per cent.
"Passenger demand continued to reflect the recovery trend in the global economy," the airline said. "Most regions recorded improvements in passenger load factors over the same month last year, mainly as a result of robust year-end travel demand during the holiday season."
Meanwhile, Qantas confirmed yesterday that it planned to raise one-way fares across the Tasman by $10 per ticket from January 28.
The increase applies to both business and economy tickets.
Fares to Hong Kong will also rise by up to 4 per cent.
Tiger eyes growth as share offer takes off | The Australian
