Tiger Airways completes investment in Southeast Asian Airlines in the Philippines
13-Aug-2012 Tiger Airways Holdings Limited ("Tiger") today completed the transaction to acquire a 40% stake in Southeast Asian Airlines Inc ("SEAir") for US$2.5 million. The purchase price of US$7 million, which was agreed with the sellers, has been reduced by the liabilities determined in a due diligence review. The investment will be held through Tiger's wholly owned subsidiary Roar Aviation II Pte. Ltd.
Tiger is committed to supporting the working capital needs of SEAir, including pre-existing liabilities, with shareholder loans of up to US$40 million. The loan tenure will be five years. "Together with our Philippine business partners, our immediate focus will be on scaling up the business through network expansion, building a strong customer base, and establishing the airline's brand presence," said Tiger Group Chief Executive Officer Koay Peng Yen, "The Philippines has tremendous growth potential and we welcome the opportunity to be at the heart of it."
The remaining Filipino shareholders, including individual investors, collectively own a 60% share of SEAir.
The investment in SEAir is Tiger's second joint venture. Tiger acquired a 33% stake in Mandala Airlines in Indonesia in January 2012. The acquisitions are in line with Tiger's strategy to expand and develop its business in the region.
SEAir will adopt Tiger's business model. This includes offering value fares to domestic and international destinations within a five-hour flying radius of the Philippines.
From 31 July 2012, SEAir has progressively launched domestic flights from Manila's Ninoy Aquino International Airport to the following destinations - Cebu, Davao, Tacloban, Iloilo, Puerto Princesa, Kalibo (Boracay) and Bacolod. SEAir also operates flights from Clark International Airport to Bangkok, Hong Kong, Kota Kinabalu, Singapore and Kalibo (Boracay).
The airline currently has two A319s and three A320s. More aircraft will be progressively added to build SEAir's network.