Tiger Aviation Group, the parent company of Tiger Airways, has lodged documents with Singaporean authorities confirming that it will launch an initial public offering (IPO) to help fund aircraft acquisitions and repay debt.
According to various media reports, the company has filed a preliminary prospectus with the Monetary Authority of Singapore which will see part of the 24 per cent stake owned by Indigo Partners sold off in the proposed IPO, which will take place in 2010. The prospectus does not say what price the shares will be listed at, or how much is expected to be raised. Citigroup, DBS Bank and Morgan Stanley will manage the IPO.
The prospectus notes that the funds will be primarily used to finance the delivery of new A320s for Tiger Airways’s operations in Singapore and Australia. Some is also likely to be used as working capital after losses from its Australian operations during the 2008 financial year left the carrier’s cash reserves depleted.
Interestingly, it appears that Singapore Airlines will maintain its 49 per cent stake in the low cost carrier. SIA recently stopped accounting for Tiger’s losses in its accounts after the cumulative losses exceeded its original investment in the carrier.