Why Tiger Airways' ambitious S$297m fund raising plan isn't shocking

Even if it's twice the size of 2011's round.

According to OCBC, Tiger Airways announced that it plans to raise S$297m through a renounceable one-for-five rights issue – the rights issue will be priced at S$0.47/share, representing a 34% discount to its close price of S$0.715 on 4 Mar 2013 – and a non-renounceable one-for-four preferential offering of perpetual convertible securities.

Although this round’s fund raising is nearly twice the size of its 2011 exercise (TGR raised S$155.2m then), it is necessary for the group to maintain its operational push
towards its goals and was not unexpected by the street.

"Similarly, the commitment of both its major shareholders – SIA (32.7%) and Temasek-owned Dahlia Investments (7.3%) – to undertake their shares of the rights was also anticipated," OCBC reported.