Despite receiving a cool reception from industry analysts, Tiger Airways’s initial public offering has closed fully subscribed, raising S$248m (A$193m) for the low cost airline group.
The issue closed with shares priced at S$1.50 (A$1.17), which was towards the higher end of its guidance indicative price of S$1.35-$1.65 (A$1.05-$1.28). The airline is now expected to list on the Singapore Stock Exchange on January 22.
As a result of the partial sale, Singapore Airlines’s holding in the low cost carrier has been diluted to 33 per cent, while Singaporean state investment fund Temasek will see its holding diluted to seven per cent. As part of the IPO, US private equity firm Indigo Partners sold a number of its shares, bringing down its holding to 14.5 per cent, while the Ryan family’s investment vehicle RyanAsia has indicated that it may use the float to sell down its stake to seven per cent.
Tiger says that it plans to use the majority of the funds to continue to grow its operations in Australia and Asia, with S$166m (A$129m) expected to go towards the purchase of new aircraft, while S$10m (A$7.8m) has been allocated to fund “potential new airlines or operating bases”. A further S$50.4m (A$39.2m) will be used to pay down short term debt.