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Tiger raises S$247.7 million from IPO

Singapore's Tiger Airways has raised S$247.7 million ($178.5) from its initial public offering (IPO), after its share offerings were over-subscribed.

It has priced the shares at $1.50 a piece, and will pocket S$233.3 million of the total proceeds after fees, says the low-cost carrier.

Tiger launched the IPO on 13 January, offering 165 million shares at a maximum price of $1.65 a piece.

More than 92% of the shares were reserved for institutional investors through an international offering, while the remaining shares were offered to the Singapore public.

The carrier received 27,072 valid applications for about 260.1 million shares at the close of the Singapore public offer, resulting in the public offer tranche being 21 times subscribed.

The international offering received indications of interest amounting to about 683.6 million shares, resulting in the placement tranche being 4.5 times subscribed, says Tiger.

"We believe that the significant demand for shares in Tiger Airways from investors around the world is a strong vote of confidence in our low-cost business model and the growth potential of Tiger Airways," says the airline's CEO Tony Davis.

Tiger 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. It operates a fleet of 17 A320s, but says it plans to quadruple this to 68 by December 2015.

The remaining funds will be used to pay off short-term loans and to establish new airlines and / or operating bases among others, Tiger has said.

"Going forward, we aim to continue growing our airlines in Singapore and Australia as well as establishing new airlines in additional markets in Asia," says Davis.

The airline will have a market capitalisation of S$781.3 million when it is listed. Its shares will commence trading on the Singapore stock exchange on 22 January.

Tiger 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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