The board of directors (the "Board" or the
"Directors") of Tiger Airways Holdings Limited (the
"Company", and together with its subsidiaries and
associated companies, the "Group") refers to its
announcement dated 24 February 2011 and the subsequent update
announcement dated 16 April 2012 (collectively, the
"Announcements") in relation to the signing of a
term sheet for the proposed acquisition of a 40% stake in
Southeast Asian Airlines (SEAir), Inc.
("SEAir").
Further to the Announcements, the Board wishes to announce
that Roar Aviation II Pte. Ltd. ("Roar II"), a
wholly-owned subsidiary of the Company, has on 4 June 2012
entered into a sale and purchase agreement (the
"SPA") with Iren Dornier and Nick Gitsis
(collectively, the "Vendors") for the acquisition
(the "Acquisition") of 55,000 Common A shares and
145,000
Common B shares in the issued share capital of SEAir,
representing 40% of the issued and outstanding shares of
SEAir (the "Acquisition Shares").
2.1 Information on SEAir
SEAir is a company incorporated in the Philippines on 23
March 1995 and has an issued and paid-up capital of
100,000,000 Philippine Pesos consisting of 300,000 Common A
shares of par value of 100 Philippine Pesos each, and 200,000
Common B shares of par value of 350
Philippine Pesos each, as at the date of this
Announcement.
Established in 1995, SEAir is a commercial airline based in
the Philippines. SEAir operates domestic flights within the
Philippines and international flights to destinations such as
Singapore, Hong Kong, Bangkok and Kota Kinabalu.
2.2 Rationale for the Acquisition
The rationale for the Acquisition is as follows:
(a) the Acquisition is in line with the strategy of the Group
(as stated in the prospectus issued in connection with its
initial public offering dated 13 January 2010) to grow its
business network into a pan-Asian one. The Company currently
has a 100% owned subsidiary in Australia. However, as was the
case with the Company's subscription of a 33% stake in
PT Mandala Airlines (as announced on 23 September 2011),
expansion into any other country in the region requires the
Company to enter into joint-ventures, with the Company taking
a minority shareholding stake due to foreign ownership
restrictions for airlines in such countries;
(b) expanding to the Philippines enables the Company to
leverage on the economies of scale in its regional network
and to leverage on the strength and size of the
Company's base in Singapore;
(c) the Company regards SEAir as an opportunity to provide
affordable low cost air travel for the domestic and
international traveler into and from the Philippines, and to
contribute to the economic growth of the country; and
(d) the Company considers SEAir a compelling investment by
reason of the strategic and demographic importance of the
Philippines.
3.1 Consideration
Under the terms of the SPA, the consideration (the
"Consideration") will be a sum of US$7,000,000,
minus the agreed liabilities of SEAir (the
"Liabilities") as at the completion of the
Acquisition ("Closing"), as determined through a
due diligence review conducted by the Company's due
diligence auditors.
The Consideration will be paid in the following manner:
(a) an initial sum of US$2,000,000 (the "Initial
Consideration") to be paid on Closing; and
(b) the amount equivalent to the sum of US$7,000,000 minus
(i) the Initial Consideration, (ii) the Liabilities, and
(iii) the Retention Sum (as defined below) to be paid within
five (5) business days from the date of final determination
of (1) the Liabilities and (2) the Potential Liabilities
Amount (as defined below).
The Liabilities and the amount of potential outstanding
liabilities (including but not limited to any tax
liabilities) of SEAir (the "Potential Liabilities
Amount") will be agreed by both parties after Closing,
based on the closing accounts prepared by SEAir and the
results of the due diligence review.
The "Retention Sum" shall be the sum equivalent to
the Potential Liabilities Amount to be withheld by the
Company, to cover any and all potential outstanding
liabilities (including but not limited to any tax
liabilities) of SEAir.
3.2 Based on the audited accounts of SEAir for the financial
year ended 31 December 2011, the book value (which is the
same as the net asset value attributable to the Acquisition
Shares) of SEAir as at 31 December 2011 is negative
US$7,000,000. Based on the unaudited financial results of
SEAir for the 3-month period ended 31 March 2012, the net
loss attributable to the Acquisition Shares of SEAir is
approximately US$1,000,000.
The Consideration was arrived at pursuant to arm's
length negotiations between the Company and the Vendors on a
willing-buyer willing-seller basis, after taking into
consideration:
(a) the rationale for the Acquisition (as described in
Paragraph 2 above); and
(b) SEAir's business prospects, profitability and
potential future earnings.
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3.3 Funding
The Consideration will be satisfied by the Company through
internal sources of funds.
3.4 Conditions Precedent
Closing is conditional upon the satisfaction or waiver by 29
June 2012 (or such other date agreed in writing by the
Company and the Vendors) of the key conditions precedent
including but not limited to the following:
(a) regulatory approvals being obtained from the relevant
authorities in the Philippines approving the Acquisition;
and
(b) the termination of all non-core businesses of SEAir to
enable SEAir to focus on its core low cost carrier model
business.
3.5 Other Agreements in Connection with the Acquisition
In connection with the Acquisition, the Company will enter
into, inter alia, the following agreements:
(a) the Company, SEAir and the remaining shareholders of
SEAir (the "OtherShareholders") will be entering
into a shareholders' agreement on Closing in relation to
the regulation of their rights and obligations inter se as
shareholders of SEAir;
(b) the Company and SEAir will be entering into an advisory
services and trademark licence agreement on Closing in
relation to certain technical and consultancy services to be
provided by the Company to SEAir on an arm's length
basis, and in respect of certain intellectual property
licences;
(c) the Vendors, the Other Shareholders and Southeast Asian
Airlines (SEAir) International, Inc. ("SEAir-I")
will be entering into a non-competition and non- solicitation
deed on Closing in favour of the Company and SEAir for a
period of three (3) years commencing from the date of
Closing; and
(d) the Company and the Other Shareholders will be entering
into an option deed on Closing pursuant to which an option
will be granted to the Company, which when exercised will
enable the Company to propose a local independent third party
(or local independent third parties) who shall be a Filipino
citizen(s) or a Philippine national(s) acceptable to the
Other Shareholders to purchase their shareholding interests
in SEAir.
Chapter 10 of the Listing Manual of the Singapore Exchange
Securities Trading Limited ("Listing Manual")
governs the continuing listing obligations of listed
companies in respect of acquisitions and disposals. The
relative figures of the Acquisition computed on the bases as
set out in Rule 1006 of the Listing Manual are as
follows:
(a) Net asset value test (Rule 1006(a))
Not applicable to the Acquisition as this test is not
applicable to an acquisition of assets.
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(b) Net profits test (Rule 1006(b))
Please note that the figures below are derived from
SEAir's unaudited pro forma accounts for the 12-month
period ended on 31 March 2012 prepared by SEAir's
management and the Group's latest announced audited
financial statements for the financial year ended 31 March
2012.
Profits (Losses) attributable to the Assets Acquired for the 12-month period ended 31 March 2012 (S$'000) | Group's Profits (Losses) for the financial year ended 31 March 2012 (S$'000) | Relative figure |
(8,456)*(1) | (104,337) | 8.1% |
*calculated based on the market exchange rate of US$1.00 to S$1.2965 as at 31 May 2012.
Note:
(1) As the Company will only be acquiring the A320 Family jet operations of SEAir, the Company has, in its computation based on the pro forma management accounts of SEAir, not included the losses attributable to the other operations of SEAir. The computation of the profits (losses) attributable to the assets acquired is based on the economic interest in SEAir, which is derived from the par value of the Acquisition Shares.
(c) Market capitalisation test (Rule 1006(c))
Consideration to be paid in respect of the Assets Acquired (S$'000) | Company's market capitalisation based on 820,193,308 issued shares at weighted average price of S$0.6697 as at 1 June 2012 (S$'000) | Relative figure |
Maximum of 9,076*(1) | 549,283 | 1.7% |
*calculated based on the market exchange rate of US$1.00 to S$1.2965 as at 31 May 2012.
Note:
(1) Please note that the final consideration is expected to be lower than the estimated figure set out above following the adjustments set out in Paragraph 3.1 above. If the final figure is lower, the relative figure for the market capitalisation test will correspondingly decrease.
(d) Equity securities test (Rule 1006(d))
Not applicable as no equity securities are to be issued in
connection with the
Acquisition.
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The pro forma financial effects of the Acquisition on the
Group are for illustrative purposes only and are neither
indicative of the actual financial effects of the Acquisition
on the net tangible assets ("NTA") per ordinary
share in the share capital of the Company ("Share")
and earnings per Share ("EPS"), nor do they
represent the actual financial position and/or results of the
Group immediately after the completion of the
Acquisition.
The financial effects of the Acquisition have been prepared
based on the following assumptions:
(a) for the purpose of computing the financial effects of the
Acquisition on the NTA per
Share, the Acquisition is assumed to have been completed on
31 March 2012; and
(b) for the purpose of computing the financial effects of the
Acquisition on the EPS, the
Acquisition is assumed to have been completed on 1 April
2011.
5.1 Effect on the NTA per Share as at 31 March 2012
There is no material impact to the Group.
Before adjusting for the Acquisition | After adjusting for the Acquisition | |
NTA (S$'000) | 248,473 | 248,473 |
NTA per share (cents) | 30.3 | 30.3 |
Note:
NTA per share is calculated based on 820,193,308 ordinary shares of the Company in issue as at 31
March 2012.
5.2 Effect on EPS
There is an additional loss of 1.21 cents per Share on a pro
forma basis.
Before adjusting for the Acquisition | After adjusting for the Acquisition | |
Profit/(Loss) after tax and non-controlling interests (S$'000) | (104,337) | (112,793) |
Weighted average number of ordinary shares ('000) | 698,351 | 698,351 |
Basic EPS (cents) | (14.94) | (16.15) |
Weighted average number of ordinary shares after adjusting for dilutive share options and awards ('000) | 698,351 | 698,351 |
Diluted EPS(cents) | (14.94) | (16.15) |
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6. INTERESTS OF DIRECTORS AND CONTROLLING SHAREHOLDERSNo Director or controlling Shareholder has any interest, direct or indirect, in the Acquisition, save in respect of his/its shareholdings (if any) in the Company.
7. DOCUMENT AVAILABLE FOR INSPECTIONA copy of the SPA may be inspected at the registered office of the Company at 50 Raffles Place #32-01 Singapore Land Tower Singapore 048623 during normal business hours for a period of three (3) months from the date of this Announcement.
BY ORDER OF THE BOARD
Joyce Fong
Company Secretary
4 June 2012
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