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Tiger Airways Holdings has completed the
transaction to acquire a 40% stake in Southeast Asian Airlines (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
are expected to be progressively added to build SEAir’s network.
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