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Tiger launches IPO to raise S$246.8 million

Singapore's Tiger Airways launched its initial public offering (IPO) today to raise S$246.8 million ($177.7 million), as it seeks to quadruple its fleet in six years and possibly set up new airlines.

It will offer 165 million shares at S$1.65 each, the top end of its range, says the low-cost carrier.

It plans to use most of the funds - up to S$166 million - to acquire new Airbus A320s and meet the associated aircraft pre-delivery payments, says the airline. It operates a fleet of 17 A320s, but plans to quadruple this to 68 by December 2015.

Of the remaining funds, the airline will use S$50.4 million to repay all outstanding short-term loans which were used to finance Tiger's pre-delivery payments.

About S$20.4 million will be used as working capital, while up to S$10 million will be used to "establish potential new airlines and / or operating bases", adds Tiger.

"The under-developed low-fare, low-cost model in the majority of countries in the region represents opportunities for our future growth. We are now ready to embark on the next stage of growth, and believe that a listing will help fuel that growth," says Tiger's CEO Tony Davis.

The airline plans to increase flight frequency and start new routes, he adds.

Under the IPO plan, Tiger is offering 155.5 million shares while its shareholder, investment firm Indigo Singapore Partners, is offering 9.5 million shares. Indigo holds a 24% stake in Tiger.

In the case of over-allotment, shareholder Ryanasia will offer up to 19.8 million shares at the same price. Ryanasia, an investment company owned by the family behind Ryanair, has a 16% stake in the airline.

Tiger's other shareholders are Singapore Airlines and Dahlia Investments, a subsidiary of state-owned Temasek Holdings.

The airline posted a full-year pre-tax loss of S$47.7 million for the fiscal year ending 31 March 2009, after it was dragged down by losses at its Australian operation.

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