Tiger Airways clawed $77m from latest fund-raising move

What will Tiger use it for?

According to DBS Vickers, Tiger Airways will be raising up to S$297m worth of funds through a combination of a rights issue (which has raised S$77m) plus a S$220m perpetual convertible securities issue underwritten by major shareholder SIA.

DBS Vickers said that with these funds in place, Tiger will be able to take delivery of its existing orderbook, and look to own a few more aircraft and obtain a better balance between owned and chartered-in fleet. Net gearing, which had risen to uncomfortable levels of 2x by end-FY13, should come down to about 0.1x after the Tiger Australia divestment and the fund raising initiatives.

"Even after accounting for ownership of 5 of the 10 aircraft scheduled for delivery each in FY14/15 and further investments in associates, we reckon Tiger’s net gearing will be less than 1x by end-FY15. Thus, we believe Tiger Airways has enough firepower to drive its growth over the next 2 years," DBS Vickers said.

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