SINGAPORE BUDGET carrier Tiger Airways, which is partly owned by the family of the late Tony Ryan, has downsized its initial public offering (IPO) plans amid concerns about the health of the global airline industry.
Tiger Airways now hopes to raise up to 273 million Singapore dollars (€136 million) in an IPO later this month, considerably less than its earlier estimate of around S$300-S$350 million.
Rumours circulating in recent weeks had suggested the carrier had scaled back its IPO expectations due to a lukewarm response by potential investors. The airline industry has been battered by falling travel and cargo demand, and a rally in fuel prices.
There are also fears that Tiger and other Asian budget carriers may have ordered too many planes, and that an industry shakeout is inevitable.
Tiger, which kicked off its investment roadshow yesterday, is selling about 165 million shares, or about 30 per cent of its enlarged share capital.
The money raised will fund aircraft purchases, be used to set up a new operating base for Tiger as well as to pay off some existing debt.
RyanAsia, the investment arm of the Ryan family, holds a 16 per cent stake in Tiger and will divest some of its stake in the airline if an over-allotment option is exercised. The Dublin-based company is owned by a single shareholder, Declan Ryan, son of Ryanair founder Tony Ryan. Singapore Airlines, which currently owns 49 per cent of Tiger, and state investor Temasek will remain invested, although their stakes will be diluted after the IPO.
Tiger’s IPO is the first by an airline in Asia since India’s Jet Airways in February 2005. Besides Tiger, Indonesian flag carrier Garuda and budget airline Lion Air are also planning to sell shares to the public this year.– (Additional reporting Reuters)
