Tiger Airways is raising about $297mil through the issuing of shares and bonds to boost its balance sheet and fund the airline's pan‐Asian expansion. It would issue 164.3mil 1‐for‐5 rights shares at 47 cents each to raise gross proceeds of $77.2mil, a further $219.8mil via convertible bonds, with shareholders entitled to subscribe for one convertible with a denomination of $1.07 for every four shares held. Each convertible bond comes with a 2% per annum coupon rate for the first five years and can be converted at the prevailing conversion price. The initial conversion price will be set at a 15% conversion premium to the average price of Tiger Airways'shares over the five trading days up to and including the price fixing date, which is two business days before the date of the close of the preferential offering.


Major shareholder Singapore Airlines has undertaken to subscribe for its respective pro‐rata entitlement to the rightsshares and convertible securities, as well asfor any excess notsubscribed for, provided thatits finalshareholding does not exceed 49.9%. The airline will use $80‐100milto repay existing loans, a further
$70‐90mil to fund new or existing airlines and/or ventures, $60‐80mil to fund aircraft payments and at least $27mil for working capital and issuance expense. On a pro‐forma basis, the net proceeds would have reduced Tiger's gearing to 0.19 times at end‐December 2012.

Source: The Business Times / Bloomberg / Straits Times