Circular to Shareholders, PCCS Holders and

Transcription

CIRCULAR DATED 9 DECEMBER 2015
THIS CIRCULAR (AS DEFINED HEREIN) IS IMPORTANT AS IT CONTAINS THE RECOMMENDATION OF
THE INDEPENDENT DIRECTORS (AS DEFINED HEREIN) AND THE ADVICE OF MAYBANK KIM ENG
SECURITIES PTE. LTD. THIS CIRCULAR REQUIRES YOUR IMMEDIATE ATTENTION. PLEASE READ IT
CAREFULLY.
This Circular is issued by Tiger Airways Holdings Limited (the “Company”). If you are in any doubt in relation
to this Circular or as to the action you should take, you should consult your stockbroker, bank manager,
solicitor, accountant, tax adviser or other professional adviser immediately.
If you have sold or transferred all your Shares and/or PCCS (each as defined herein), you should immediately
hand this Circular to the purchaser or transferee or to the bank, stockbroker or agent through whom you
effected the sale or transfer for onward transmission to the purchaser or transferee.
The Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of any of
the statements made, reports contained, opinions expressed or advice given in this Circular.
TIGER AIRWAYS HOLDINGS LIMITED
(Incorporated in the Republic of Singapore)
(Company Registration No. 200701866W)
CIRCULAR TO SHAREHOLDERS, PCCS HOLDERS AND OPTIONHOLDERS
in relation to the
VOLUNTARY CONDITIONAL GENERAL OFFER
by
DBS BANK LTD.
(Company Registration No. 196800306E)
for and on behalf of
SINGAPORE AIRLINES LIMITED
(Company Registration No. 197200078R)
Independent Financial Adviser to the Independent Directors
MAYBANK KIM ENG SECURITIES PTE. LTD.
(Company Registration No. 197201256N)
SHAREHOLDERS AND PCCS HOLDERS SHOULD NOTE THAT THE OFFER DOCUMENT (AS
DEFINED HEREIN) STATES THAT ACCEPTANCES SHOULD BE RECEIVED BY 5.30 P.M. (SINGAPORE
TIME) ON 28 DECEMBER 2015 (MONDAY) OR SUCH LATER DATE(S) AS MAY BE ANNOUNCED FROM
TIME TO TIME BY OR ON BEHALF OF THE OFFEROR (AS DEFINED HEREIN).
INFORMATION RELATING TO THE OFFER, THE PCCS OFFER AND
THE OPTIONS PROPOSAL AND
THE RECOMMENDATION OF THE INDEPENDENT DIRECTORS
(A) KEY TERMS OF THE OFFER
1.
Offer Consideration Each Accepting Shareholder will be:
(a)
paid S$0.41 in cash (the “Offer Price”) for each Offer Share validly tendered in
acceptance of the Offer; and
(b)
granted a non-transferable option to subscribe for Offeror Shares on, inter alia, the
terms and conditions set out below:
(i)
the subscription price of the Offeror Shares payable by the Accepting
Shareholder exercising the Shares Option to Subscribe will be S$11.1043
(the “Subscription Price”) for each Offeror Share; and
(ii)
the maximum number of Offeror Shares which the Accepting Shareholder
may subscribe for pursuant to the Shares Option to Subscribe will be
determined as follows (rounded down to the nearest whole Offeror Share):
Maximum Number of Offeror Shares = A ÷ B
Where:
“A” =
Total Offer Price paid or payable to the Accepting Shareholder
pursuant to the terms of the Offer in respect of all the Offer Shares
validly tendered by such Accepting Shareholder in acceptance of
the Offer
“B” =
The Subscription Price
Please refer to Section 2.3.2 and Appendix 4 to the Offer Document for details of
the Shares Option to Subscribe.
2.
Acceptance Condition The Offer is subject to, inter alia, the Offeror having received,
by the close of the Offer, valid acceptances (which have not been withdrawn) in respect
of such number of Offer Shares which, when taken together with the Shares owned,
controlled or agreed to be acquired by the Offeror and parties acting in concert with it
before or during the Offer, will result in the Offeror and parties acting in concert with it
holding such number of Shares carrying more than 90 per cent. of the voting rights
attributable to all the Shares in issue as at the close of the Offer. The Offeror reserves
the right to waive the Acceptance Condition or reduce such condition to a level equal to
or less than 90 per cent. of the voting rights attributable to all the Shares in issue as at
the close of the Offer, subject to the approval of the SIC.
Please refer to the Offer Document, in particular Sections 2 and 8 and Appendices 1 and 4,
and Section 2 of this Circular for further information and details relating to the Offer.
All capitalised terms shall bear the same meanings as ascribed to them in this Circular.
(B) KEY TERMS OF THE PCCS OFFER
1.
PCCS Offer Consideration Each Accepting PCCS Holder will be:
(a)
paid the “see-through” price (the “PCCS Offer Price”) for the PCCS validly
tendered in acceptance of the PCCS Offer in accordance with Note 1(a) on Rule
19 of the Code. In other words, the PCCS Offer Price will be an amount in cash
equal to the Offer Price multiplied by the number of Offer Shares (rounded down
to the nearest Offer Share) which would have been issued had the PCCS been
converted (based on the aggregate principal amount of the PCCS tendered in
acceptance of the PCCS Offer); and
(b)
granted a non-transferable option to subscribe for Offeror Shares on, inter alia, the
terms and conditions set out below:
(i)
the subscription price of the Offeror Shares payable by the Accepting PCCS
Holder exercising the PCCS Option to Subscribe will be the Subscription
Price for each Offeror Share; and
(ii)
the maximum number of Offeror Shares which the Accepting PCCS Holder
may subscribe for pursuant to the PCCS Option to Subscribe will be
Where:
“A” =
Total PCCS Offer Price paid or payable to the Accepting PCCS
Holder pursuant to the terms of the PCCS Offer in respect of all the
PCCS validly tendered by such Accepting PCCS Holder in
acceptance of the PCCS Offer
“B” =
Please refer to Section 3.3.2 and Appendix 4 to the Offer Document for details of
the PCCS Option to Subscribe.
2.
Condition Section 3.4 of the Offer Document states that the PCCS Offer will be subject
to and conditional upon the Offer becoming or being declared unconditional in all
respects in accordance with its terms.
3.
Offer and PCCS Offer Mutually Exclusive Section 3.6 of the Offer Document states
that whilst the PCCS Offer is conditional upon the Offer becoming or being declared
unconditional in all respects in accordance with its terms, the Offer will not be
conditional upon acceptances received in relation to the PCCS Offer. The Offer and the
PCCS Offer are separate and are mutually exclusive. The PCCS Offer does not form
part of the Offer, and vice versa.
Please refer to the Offer Document, in particular Sections 3 and 8 and Appendices 1 and 4,
and Section 3 of this Circular for further information and details relating to the PCCS Offer.
(C) KEY TERMS OF THE OPTIONS PROPOSAL
1.
Options Proposal A proposal is made to all Optionholders, subject to:
(a)
the Offer becoming or being declared to be unconditional in all respects in
accordance with its terms; and
(b)
the relevant Options continuing to be exercisable into new Shares,
where the Offeror will pay an Optionholder a cash amount (the “Options Price”) in
consideration of each such Optionholder agreeing:
(i)
not to exercise all or any of the Options held by him in respect of which he has
accepted the Options Proposal (the “Relevant Options”) into new Shares; and
(ii)
not to exercise all or any of his rights as holder of the Relevant Options,
in each case from the date of his acceptance of the Options Proposal to the dates of
expiry of the respective Relevant Options.
2.
Options Price Section 4.3 of the Offer Document states that the Options Price is
calculated on a “see-through” basis on the basis of the Offer Price. In other words, the
Options Price for an Option will be the amount by which the Offer Price exceeds the
subscription price of that Option. If, however, the subscription price of an Option is
equal to or more than the Offer Price, the Options Price for such Option will be the
nominal amount of S$0.001.
3.
Offer and Options Proposal Mutually Exclusive Section 4.4 of the Offer Document
states that whilst the Options Proposal is conditional upon the Offer becoming or being
declared to be unconditional in all respects in accordance with its terms, the Offer will
not be conditional upon acceptances received in relation to the Options Proposal. The
Offer and the Options Proposal are separate and are mutually exclusive. The Options
Proposal does not form part of the Offer, and vice versa.
Please refer to Section 4 of the Offer Document, the separate letter despatched to the
Optionholders on the Despatch Date and Section 4 of this Circular for further information and
details relating to the Options Proposal.
(D) NO AWARDS OFFER
Section 5 of the Offer Document states that under the terms of the Tiger Airways RSP and
the Tiger Airways PSP, the Awards are not transferable by the holders thereof. In view of this
restriction, the Offeror will not be making an offer to acquire, or an appropriate proposal in
respect of, the Awards. For the avoidance of doubt, the Offer will be extended to all new
Shares unconditionally issued or delivered or to be issued or delivered pursuant to the
vesting of any Awards prior to the final Closing Date.
(E)
RECOMMENDATION OF MAYBANK KIM ENG SECURITIES PTE. LTD. TO THE
INDEPENDENT DIRECTORS
The below is an extract of part of Section 12.4 of the letter dated 9 December 2015 from
MKES to the Independent Directors in respect of the Offer, the PCCS Offer and the
Options Proposal as set out in Appendix I to this Circular, and may not be read on its
own. The IFA Letter is addressed to the Independent Directors solely for their benefit, in
connection with and for the purpose of their consideration of the Offer, any recommendation
to the Shareholders, the PCCS Holders and the Optionholders remains the sole
responsibility of the Independent Directors.
“12.4
Having considered the aforesaid points including the various factors as set out in
this letter and information made available to us as at the Latest Practicable Date,
we are of the opinion that the financial terms of the Offer are, on balance, fair
and reasonable.
Based on our opinion, we advise the Independent Directors to recommend
that Shareholders accept the Offer, unless Shareholders are able to obtain a
price higher than the Offer Price on the open market, taking into account all
brokerage commissions or transaction costs in connection with open market
transactions.
Having also considered these points including the various factors as set out in this
letter and information made available to us as at the Latest Practicable Date, we
are of the opinion that the financial terms of the PCCS Offer are, on balance,
fair and reasonable.
We also note that as the PCCS Offer Price is calculated on a “see-through” basis,
the consideration a PCCS Holder would receive from accepting the PCCS Offer
would be the same as if the PCCS Holder were to convert the PCCS and accept
the Offer. Our advice to Shareholders with respect to the Offer is applicable to
PCCS Holders. Accordingly, we advise the Independent Directors to
recommend that PCCS Holders accept the PCCS Offer or sell their PCCS or
Shares, after converting their PCCS, in the open market if they can obtain a
price higher than the Offer Price after taking into account all brokerage
commissions or transaction costs in connection with open market
transactions.
The Accepting Shareholders and the Accepting PCCS Holders will have the
flexibility to decide how they wish to utilise their cash consideration, whether to
acquire the Offeror Shares through the exercise of the Option to Subscribe or
through the open market or not at all. Accepting Shareholders and the Accepting
PCCS Holders who wish to remain invested in the long-term prospects of the SIA
Group and share in the future of Tiger Airways through a stake in SIA can, subject
to the Offer becoming or being declared to be unconditional in all respects in
accordance with its terms, exercise the Option to Subscribe.
The decision to exercise the Option to Subscribe represents an investment
decision for the Accepting Shareholders and Accepting PCCS Holders that is
separate from the decision on whether to accept the Offer, and is subject to
various factors, including but not limited to investment objectives of each
Accepting Shareholder and Accepting PCCS Holder.
As each Shareholder and PCCS Holder would have different investment
objectives and profiles, we would advise the Independent Directors to
recommend that any individual Shareholder and PCCS Holder who may
require specific advice in relation to his or her investment objectives or
portfolio should consult his or her stockbroker, bank manager, solicitor,
accountant or other professional advisers immediately.
As the Offer is being extended on the same terms and conditions to all new Shares
unconditionally issued or to be issued pursuant to the valid exercise prior to the
close of the Options Proposal, we recommend that the Independent Directors
provide the same advice to the Optionholders whose exercise price is lower than
the Offer Price as is provided to the Shareholders.
In respect of the Options Proposal, we note that as the Options Price is calculated
on a “see-through” basis, the consideration an Optionholder would receive from
accepting the Options Proposal would be the same as if the Optionholder were to
convert the Options and accept the Offer. Our advice to Shareholders with respect
to the Offer is applicable to Optionholders. Accordingly, we advise the
Independent Directors to recommend Optionholders to accept the Options
Proposal or sell their Shares, after exercising their Options, in the open
market if they can obtain a price higher than the Offer Price after deducting
expenses.
We wish to emphasise that we have been appointed to render our opinion on the
Latest Practicable Date. Our terms of reference do not require us to express, and
we do not express, an opinion on the future growth prospects of the Company.”
(F)
RECOMMENDATION OF THE INDEPENDENT DIRECTORS
1.
The Independent Directors, having considered carefully the terms of the Offer, the
PCCS Offer and the Options Proposal and the advice given by MKES to the
Independent Directors in the IFA Letter, have set out their recommendation on the Offer,
the PCCS Offer, and the Options Proposal respectively, below:
(a)
Offer
The Independent Directors concur with MKES’ assessment of the Offer and its
recommendation thereon, as set out in Section 11.3 of this Circular and in the IFA
Letter. Accordingly, the Independent Directors recommend that the
Shareholders ACCEPT the Offer.
(b)
PCCS Offer
The Independent Directors concur with MKES’ assessment of the PCCS Offer and
its recommendation thereon, as set out in Section 11.3 of this Circular and in the
IFA Letter. Accordingly, the Independent Directors recommend that the PCCS
Holders ACCEPT the PCCS Offer.
(c)
Options Proposal
The Independent Directors concur with MKES’ assessment of the Options
Proposal and its recommendation thereon, as set out in Section 11.3 of this
Circular and in the IFA Letter. Accordingly, the Independent Directors
recommend that the Optionholders ACCEPT the Options Proposal.
2.
In making the above recommendation, the Independent Directors have not had regard
to the general or specific investment objectives, financial situations, risk profiles, tax
positions and/or particular needs and constraints of any specific Shareholder, PCCS
Holder or Optionholder. As different Shareholders, PCCS Holders and Optionholders
would have different investment profiles and objectives, the Independent Directors
recommend that any specific Shareholder, PCCS Holder and Optionholder who may
require specific advice in relation to his Shares, PCCS and/or Options should consult
his stockbroker, bank manager, solicitor, accountant or other professional advisers.
3.
Shareholders, PCCS Holders and Optionholders should read and consider
carefully the recommendation of the Independent Directors set out in Section 11.4
of this Circular and the advice of MKES to the Independent Directors in respect of
the Offer, the PCCS Offer and the Options Proposal set out in Appendix I to this
Circular in their entirety before deciding whether to accept or reject the Offer, the
PCCS Offer and/or the Options Proposal (as the case may be). Shareholders,
PCCS Holders and Optionholders are also urged to read the Offer Document and
this Circular carefully.
CONTENTS
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . .
9
INDICATIVE TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
LETTER FROM THE BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
1.
BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
2.
THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
3.
THE PCCS OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17
4.
THE OPTIONS PROPOSAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
5.
NO AWARDS OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
6.
OTHER TERMS OF THE OFFER AND THE PCCS OFFER . . . . . . . . . . . . . . . . . . .
22
7.
FURTHER DETAILS RELATING TO THE OPTION TO SUBSCRIBE AND THE
OFFEROR SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
8.
DESCRIPTION OF THE OFFEROR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
9.
OFFEROR’S RATIONALE AND INTENTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
10. DIRECTORS’ INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31
11.
ADVICE AND RECOMMENDATION IN RELATION TO THE OFFER, THE PCCS
OFFER AND THE OPTIONS PROPOSAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31
12. OVERSEAS PERSONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40
13. INFORMATION PERTAINING TO CPFIS INVESTORS AND SRS INVESTORS . . . .
41
14. ACTION TO BE TAKEN BY SHAREHOLDERS AND PCCS HOLDERS . . . . . . . . . .
42
15. DIRECTORS’ RESPONSIBILITY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42
APPENDIX I LETTER FROM MKES TO THE INDEPENDENT DIRECTORS . . . . . . . . . .
I-1
APPENDIX II ADDITIONAL GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . .
II-1
APPENDIX III EXTRACT OF ARTICLES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III-1
This page has been intentionally left blank.
DEFINITIONS
Except where the context otherwise requires, the following definitions apply throughout this
Circular:
GENERAL
“Acceptance Condition”
:
Shall have the meaning ascribed to it in Section 2.6(a) of this
Circular
“Acceptance Forms”
:
The Shares FAA, the Shares FAT and the PCCS FAA
“Accepting PCCS Holder”
:
A PCCS Holder who validly accepts the PCCS Offer
“Accepting Shareholder”
:
A Shareholder who validly accepts the Offer
“Adjusted Offer Price”
:
Shall have the meaning ascribed to it in Section 2.5(b) of this
Circular
“AIP”
:
Circular
“Articles”
:
The articles of association of the Company
“Awards”
:
Outstanding share awards granted under the Tiger Airways
RSP and the Tiger Airways PSP
“Board”
:
The Board of Directors of the Company
“Books Closure Date”
:
Circular
“Business Day”
:
A day other than Saturday, Sunday or a public holiday on
which banks are open for business in Singapore
“Circular”
:
This circular to Shareholders, PCCS Holders
Optionholders, enclosing, inter alia, the IFA Letter
“Closing Date”
:
5.30 p.m. (Singapore time) on 28 December 2015 (Monday) or
such later date(s) as may be announced from time to time by
or on behalf of the Offeror, being the last day for the
lodgement of acceptances of the Offer and the PCCS Offer
“Code”
:
The Singapore Code on Take-overs and Mergers
“Commencement Date”
:
26 November 2015, being the Despatch Date and the date
from which the Offer and the PCCS Offer are open for
acceptances
“Companies Act”
:
The Companies Act (Chapter 50 of Singapore)
and
“Company Securities”
:
(a)
Shares;
(b)
PCCS;
(c)
Options;
(d)
any other securities which carry voting rights in the
Company; and
(e)
any other convertible securities, warrants, options,
awards or derivatives in respect of the Shares, the PCCS
or other securities which carry voting rights in the
Company
“CPF Agent Banks”
:
Agent banks included under the CPFIS
“CPFIS”
:
Central Provident Fund Investment Scheme
“CPFIS Investors”
:
Investors who have purchased Shares using their CPF
contributions pursuant to the CPFIS
“Despatch Date”
:
26 November 2015, being the date of despatch of the Offer
Document
“Directors”
:
The directors of the Company as at the Latest Practicable
Date
“Distributions”
:
(a)
In respect of the Offer Shares, any dividends, rights,
other distributions and/or return of capital; and
(b)
in respect of the PCCS, any interest, payments, rights
and other distributions
“Encumbrance”
:
Any claim, charge, pledge, mortgage, lien, option, equity,
power of sale, declaration of trust, hypothecation, retention of
title, right of pre-emption, right of first refusal, moratorium or
other third party right or security interest of any kind or any
agreement, arrangement or obligation to create any of the
foregoing
“Final Settlement Date”
:
The last settlement date in respect of the Offer and the PCCS
Offer for all the Offer Shares and the PCCS validly tendered in
acceptance of the Offer and the PCCS Offer respectively,
being a date falling after the final Closing Date but on or
before the expiry of 10 days from the final Closing Date
(provided that if such date is not a Business Day, the next
Business Day)
“FY”
:
Financial year ended or ending, as the case may be, 31 March
2
“IFA Letter”
:
The letter dated 9 December 2015 from MKES to the
Independent Directors in respect of the Offer, the PCCS Offer
and the Options Proposal as set out in Appendix I to this
Circular
“Interested Person”
:
As defined in the Note on Rule 23.12 of the Code, an
interested person, in relation to a company, is:
(a)
a director, chief executive
shareholder of the company;
officer,
or
substantial
(b)
the immediate family of a director, the chief executive
officer, or a substantial shareholder (being an individual)
of the company;
(c)
the trustees, acting in their capacity as such trustees, of
any trust of which a director, the chief executive officer or
a substantial shareholder (being an individual) and his
immediate family is a beneficiary;
(d)
any company in which a director, the chief executive
officer or a substantial shareholder (being an individual)
together and his immediate family together (directly or
indirectly) have an interest of 30% or more;
(e)
any company that is the subsidiary, holding company or
fellow subsidiary of the substantial shareholder (being a
company); or
(f)
any company in which a substantial shareholder (being a
company) and any of the companies listed in (e) above
together (directly or indirectly) have an interest of 30% or
more
“Latest Practicable Date”
:
1 December 2015, being the latest practicable date prior to
the printing of this Circular
“Listing Manual”
:
The Listing Manual of the SGX-ST, as amended up to the
Latest Practicable Date
“Market Day”
:
A day on which the SGX-ST is open for the trading of
securities
“maximum potential
issued share capital of
the Company”
:
Circular
“Offer”
:
The voluntary conditional general offer made by DBS, for and
on behalf of the Offeror, for all the Offer Shares on the terms
and subject to the conditions set out in the Offer Document,
the Shares FAA and the Shares FAT, as such offer may be
amended, extended and revised from time to time by or on
behalf of the Offeror
3
“Offer Announcement”
:
The announcement of the Offer released by DBS, for and on
behalf of the Offeror, on the Offer Announcement Date
“Offer Announcement
Date”
:
6 November 2015, being the date of the Offer Announcement
“Offer Document”
:
The offer document dated 26 November 2015, including the
Acceptance Forms, and any other document(s) which may be
issued by or on behalf of the Offeror to amend, revise,
supplement or update the document(s) from time to time
“Offer Document LPD”
:
19 November 2015, being the latest practicable date prior to
the printing of the Offer Document
“Offer Price”
:
The offer price for each Offer Share validly tendered in
acceptance of the Offer, as more particularly described in
Section 2.3(a) of this Circular
“Offer Shares”
:
All Shares to which the Offer relates, as more particularly
described in Section 2.2 of this Circular
“Offer Unconditional
Date”
:
The date on which the Offer becomes or is declared to be
unconditional in all respects in accordance with its terms
“Offeror Awards”
:
Outstanding share awards granted by the Offeror
“Offeror Options”
:
Outstanding options granted under the Offeror Scheme
“Offeror Scheme”
:
SIA Employee Share Option Plan
“Offeror Securities”
:
(a)
Offeror Shares;
(b)
securities which carry substantially the same rights as
any Offeror Shares; and
(c)
convertible securities, warrants, options or derivatives in
respect of any Offeror Shares or such securities in (b)
“Offeror Shares”
:
Ordinary shares in the capital of the Offeror
“Option to Subscribe”
:
The Shares Option to Subscribe and the PCCS Option to
Subscribe
“Optionholder”
:
Holder of the Options
“Options”
:
Outstanding options granted under the Tiger Airways Scheme
to subscribe for new Shares
“Options Price”
:
Shall have the meaning ascribed to it in Section 4.2 of this
Circular
4
“Options Proposal”
:
Circular
“OTS Exercise Notice”
:
The notice for the exercise of the Option to Subscribe, in a
form to be determined by the Offeror in its absolute discretion
“OTS Exercise Period”
:
Shall have the meaning ascribed to it in Section 2.3(b)(ii) of
this Circular
“Overseas Persons”
:
Shareholders and/or PCCS Holders whose addresses as
shown in the Register of the Company or in the records of
CDP (as the case may be) are outside Singapore
“PCCS”
:
The outstanding 2.0 per cent. perpetual convertible capital
securities issued by the Company on 22 April 2013, in the
denomination of S$1.07 for each perpetual convertible capital
security
“PCCS Conversion Price”
:
Circular
“PCCS FAA”
:
Form of Acceptance and Authorisation for PCCS in respect of
the PCCS Offer, applicable to PCCS Holders whose PCCS
are deposited with CDP and which forms part of the Offer
Document
“PCCS Holders”
:
Depositors who have PCCS entered against their names in
the Depository Register
“PCCS Offer”
:
The offer made by DBS, for and on behalf of the Offeror, for all
the PCCS on the terms and subject to the conditions set out
in the Offer Document and the PCCS FAA, as such offer may
be amended, extended and revised from time to time by or on
behalf of the Offeror
“PCCS Offer Price”
:
The offer price for the PCCS validly tendered in acceptance of
the PCCS Offer, as more particularly described in Section
3.3(a) of this Circular
“PCCS Option to
Subscribe” or
“PCCS OTS”
:
Circular
“PCCS Transfer Date”
:
Circular
“Register”
:
The register of Shareholders, as maintained by the Registrar
“Relevant Legislative
Amendment”
:
Circular
5
“Relevant Options”
:
Shall have the meaning ascribed to it in Section 4.2(i) of this
Circular
“Rule 22.6 Period”
:
Shall have the meaning ascribed to it in Section 6.1(c) of this
Circular
“S$” and “cents”
:
Singapore dollars and cents respectively, being the lawful
currency of Singapore
“Securities Account”
:
A securities account maintained by a depositor with CDP, but
does not include a securities sub-account
“SFA”
:
The Securities and Futures Act (Chapter 289 of Singapore)
“Shareholders”
:
Holders of the Shares in issue as indicated on the Register
and depositors who have Shares entered against their names
in the Depository Register
“Shares”
:
Ordinary shares in the capital of the Company
“Shares FAA”
:
Form of Acceptance and Authorisation for Offer Shares in
respect of the Offer, applicable to Shareholders whose Offer
Shares are deposited with CDP and which forms part of the
Offer Document
“Shares FAT”
:
Form of Acceptance and Transfer in respect of the Offer,
applicable to Shareholders whose Offer Shares are registered
in their own names in the Register and are not deposited with
CDP and which forms part of the Offer Document
“Shares Option to
Subscribe” or “Shares
OTS”
:
Circular
“Shut-Off Notice”
:
Shall have the meaning ascribed to it in Section 6.1(c) of this
Circular
“SIA PSP”
:
Collectively, the SIA Performance Share Plan and the SIA
Performance Share Plan 2014
“SIA RSP”
:
Collectively, the SIA Restricted Share Plan and the SIA
Restricted Share Plan 2014
“SRS”
:
The Supplementary Retirement Scheme
“SRS Agent Banks”
:
Agent banks included under SRS
“SRS Investors”
:
Investors who have purchased Shares pursuant to SRS
“Subscription Price”
:
Shall have the meaning ascribed to it in Section 2.3(b)(iii) of
this Circular
6
“Tiger Airways PSP”
:
Tiger Airways Group Performance Share Plan
“Tiger Airways RSP”
:
Tiger Airways Group Restricted Share Plan
“Tiger Airways Scheme”
:
Pre-IPO Tiger Aviation Share Option Scheme
“Tiger Airways Share
Plans”
:
Collectively, the Tiger Airways RSP and the Tiger Airways PSP
“VWAP”
:
Volume weighted average price
“%” or “per cent.”
:
Per centum or percentage
COMPANIES/ORGANISATIONS/PERSONS
“CDP”
:
The Central Depository (Pte) Limited
“CPF”
:
Central Provident Fund
“DBS”
:
DBS Bank Ltd.
“Independent Directors”
:
The Directors who are considered independent for the
purposes of the Offer, the PCCS Offer and the Options
Proposal, namely, Mr Hsieh Fu Hua, Mr Lang Tao Yih, Arthur
and Mr Yap Chee Keong
“IndiGo”
:
InterGlobe Aviation Limited
“Maybank Group”
:
Malayan Banking Berhad and its subsidiaries
“MKES”
:
Maybank Kim Eng Securities Pte. Ltd., the independent
financial adviser to the Independent Directors in respect of the
Offer, the PCCS Offer and the Options Proposal
“Registrar”
:
Boardroom Corporate & Advisory Services Pte. Ltd., the share
registrar of the Company
“SGX-ST”
:
Singapore Exchange Securities Trading Limited
“SIA” or the “Offeror”
:
Singapore Airlines Limited
“SIA Group”
:
SIA and its subsidiaries
“SIC”
:
Securities Industry Council of Singapore
“Tiger Airways” or
the “Company”
:
Tiger Airways Holdings Limited
“Tiger Airways Group” or
the “Group”
:
The Company and its subsidiaries
7
Unless otherwise defined, the term “acting in concert” shall have the meaning ascribed to it in
the Code.
The terms “depositor” and “Depository Register” shall have the meanings ascribed to them
respectively in the Companies Act.
The terms “subsidiary” and “related corporation” shall have the meanings ascribed to them
respectively in Section 5 and Section 6 of the Companies Act.
The headings in this Circular are inserted for convenience only and shall be ignored in construing
this Circular.
Words importing the singular shall, where applicable, include the plural and vice versa and words
importing one (1) gender shall, where applicable, include the other or neuter genders. References
to persons shall, where applicable, include corporations.
Any reference in this Circular to any enactment or statutory provision is a reference to that
enactment or statutory provision for the time being amended or re-enacted. Any word defined in
the Companies Act, the SFA, the Listing Manual or the Code or any statutory modification thereof
and not otherwise defined in this Circular shall, where applicable, have the meaning assigned to
it under the Companies Act, the SFA, the Listing Manual or the Code or any statutory modification
thereof, as the case may be, unless the context otherwise requires.
Any reference to a time of day and date in this Circular is made by reference to Singapore time
and date respectively, unless otherwise stated.
Any discrepancies in this Circular between the listed amounts and the totals thereof are due to
rounding. Accordingly, figures shown as totals in this Circular may not be an arithmetic
aggregation of the figures that precede them.
Statements which are reproduced in their entirety from the Offer Document, the IFA Letter
and the Articles are set out in this Circular within quotes and in italics and capitalised terms
used within these reproduced statements bear the meanings ascribed to them in the Offer
Document, the IFA Letter and the Articles respectively.
In this Circular, any reference to the total number of issued Shares is a reference to 2,500,082,980
Shares as at the Latest Practicable Date.
8
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS
All statements other than statements of historical facts included in this Circular are or may be
forward-looking statements. Forward-looking statements include but are not limited to those using
words such as “aim”, “seek”, “expect”, “anticipate”, “estimate”, “believe”, “intend”, “project”, “plan”,
“strategy”, “forecast” and similar expressions or future or conditional verbs such as “will”, “would”,
“should”, “could”, “may” and “might”. These statements reflect the Company’s current
expectations, beliefs, hopes, intentions or strategies regarding the future and assumptions in light
of currently available information. Such forward-looking statements are not guarantees of future
performance or events and involve known and unknown risks and uncertainties. Accordingly,
actual results may differ materially from those described in such forward-looking statements.
Shareholders, PCCS Holders, Optionholders and other investors of the Company should not place
undue reliance on such forward-looking statements, and neither the Company nor MKES
guarantees any future performance or event or assumes any obligation to update publicly or
revise any forward-looking statement.
9
INDICATIVE TIMETABLE (1)
Despatch Date and Commencement
Date (in respect of the Offer and the
PCCS Offer) (2)
:
26 November 2015
Closing Date (in respect of the Offer and
the PCCS Offer) (3)(4)
:
5.30 p.m. (Singapore time) on 28 December 2015
(Monday) or such later date(s) as may be
announced from time to time by or on behalf of the
Offeror
Date of settlement (in respect of the
Offer and the PCCS Offer) on which the
Offer Price, the PCCS Offer Price and
the Letter(s) of Grant are despatched to
Accepting Shareholders and Accepting
PCCS Holders (2)
:
In respect of valid and complete acceptances
received on or before the Offer Unconditional Date,
within 10 days after the Offer Unconditional Date
Final Settlement Date (in respect of the
Offer and the PCCS Offer)
:
Within 10 days after the Closing Date
Expected date of despatch of the OTS
Exercise
Notice
to
Accepting
Shareholders and Accepting PCCS
Holders
:
Within 15 Market Days after the Final Settlement
Date (“Day T”)
Expected date on which the
Exercise Period commences
OTS
:
3 rd Market Day after Day T (“Day Y”)
Expected last date for exercise of the
Option to Subscribe
:
15 th Market Day from Day Y (“Day Z”)
Expected date of issue and/or transfer of
Offeror Shares pursuant to valid
exercise of the Option to Subscribe
:
Within 10 Market Days after Day Z
Expected date when the Securities
Accounts of Accepting Shareholders
and Accepting PCCS Holders who
validly exercise the Option to Subscribe
are credited with Offeror Shares
:
Expected
date
for
listing
and
commencement of trading of Offeror
Shares issued and/or transferred
pursuant to valid exercise of the Option
to Subscribe by Accepting Shareholders
and Accepting PCCS Holders
:
In respect of valid and complete acceptances
received after the Offer Unconditional Date but on
or before the Closing Date, within 10 days after the
date of receipt of each such acceptance
10
Notes:
(1)
This indicative timetable has been extracted from page 10 of the Offer Document. Please also refer to Appendix 1
to the Offer Document for further details.
(2)
Other than the Despatch Date, the Commencement Date and the date of settlement in respect of the Offer and the
PCCS Offer, the other dates set out in the timetable above are indicative only and the actual dates of such events
will be announced in due course by or on behalf of the Offeror on SGXNET.
(3)
The Offer and the PCCS Offer must initially be open for 28 days after the Despatch Date.
(4)
CPFIS Investors, SRS Investors and other investors who hold Shares through finance companies or Depository
Agents will receive notification letter(s) from their respective CPF Agent Banks, SRS Agent Banks, finance
companies and Depository Agents. Such investors should refer to those notification letter(s) for details of the last
date and time (which may be earlier than the Closing Date) to reply to their respective CPF Agent Banks, SRS Agent
Banks, finance companies and Depository Agents in order to accept the Offer and/or the PCCS Offer.
11
TIGER AIRWAYS HOLDINGS LIMITED
(Company Registration No. 200701866W)
LETTER FROM THE BOARD OF DIRECTORS
Board of Directors:
Mr Hsieh Fu Hua (Chairman and Independent Director)
Mr Lee Lik Hsin (Executive Director and Chief Executive Officer)
Ms Chong Phit Lian (Non-Executive Director (Non-Independent))
Mr Lang Tao Yih, Arthur (Independent Director)
Mr Lee Chong Kwee (Non-Executive Director (Non-Independent))
Mr Ng Chin Hwee (Non-Executive Director (Non-Independent))
Mr Sirisena Mervyn s/o Piankara Mestrige
(Non-Executive Director (Non-Independent))
Mr Yap Chee Keong (Independent Director)
Mr Yeap Beng Hock Gerard (Non-Executive Director
(Non-Independent))
Registered Office:
17 Changi Business Park
Central 1
#04-06/09
Honeywell Building
Singapore 486073
9 December 2015
To:
The Shareholders, PCCS Holders and Optionholders of the Company
Dear Sir/Madam
VOLUNTARY CONDITIONAL GENERAL OFFER BY DBS FOR AND ON BEHALF OF THE
OFFEROR
1.
BACKGROUND
1.1
Offer Announcement
On 6 November 2015, DBS announced, for and on behalf of the Offeror, that the Offeror
intends to make a voluntary conditional general offer for all the issued Shares, other than
those already owned or agreed to be acquired by the Offeror as at the Commencement
Date.
A copy of the Offer Announcement is available on the website of the SGX-ST at
www.sgx.com.
1.2
Offer Document and Options Proposal Letter
Shareholders and PCCS Holders should have by now received a copy of the Offer
Document setting out, inter alia, the terms and conditions of the Offer and the PCCS Offer.
The principal terms and conditions of the Offer and the PCCS Offer are set out in Sections
2 and 3 of the Offer Document respectively. Shareholders and PCCS Holders are urged
to read the terms and conditions of the Offer and the PCCS Offer contained in the
Offer Document carefully.
A copy of the Offer Document is available on the website of the SGX-ST at www.sgx.com.
A separate letter setting out the details of the Options Proposal has been despatched to
Optionholders on the Despatch Date. Optionholders are urged to read the terms and
conditions of the Options Proposal contained in the letter carefully.
12
1.3
Purpose of this Circular
The purpose of this Circular is to provide Shareholders, PCCS Holders and Optionholders
with relevant information pertaining to the Offer, the PCCS Offer and the Options Proposal
and to set out the recommendation of the Independent Directors and the advice of MKES
to the Independent Directors in respect of the Offer, the PCCS Offer and the Options
Proposal.
Shareholders, PCCS Holders and Optionholders should consider carefully the
recommendation of the Independent Directors and the advice of MKES to the
Independent Directors in respect of the Offer, the PCCS Offer and/or the Options
Proposal (as the case may be) before deciding whether to accept or reject the Offer,
the PCCS Offer and/or the Options Proposal (as the case may be).
2.
THE OFFER
2.1
Offer
Based on the information set out in the Offer Document, DBS has, for and on behalf of the
Offeror, made the Offer for all the Offer Shares, in accordance with Section 139 of the SFA
and the Code.
2.2
Offer Shares
Section 2.2 of the Offer Document states that the Offer will be extended to:
(a)
all issued Shares, other than those already owned or agreed to be acquired by the
Offeror as at the Commencement Date, but including issued Shares owned,
controlled or agreed to be acquired by parties acting or deemed to be acting in
concert with the Offeror in connection with the Offer;
(b)
all new Shares unconditionally issued or to be issued pursuant to the valid
conversion of any of the PCCS prior to the final Closing Date;
(c)
all new Shares unconditionally issued or to be issued pursuant to the valid exercise
of any Options granted under the Tiger Airways Scheme prior to the final Closing
Date; and
(d)
all new Shares unconditionally issued or delivered, or to be issued or delivered,
pursuant to the vesting of any Awards granted under the Tiger Airways RSP and the
Tiger Airways PSP prior to the final Closing Date,
(collectively, the “Offer Shares”).
2.3
Offer Consideration
As set out in Section 2.3 of the Offer Document, the consideration for the Offer Shares
validly tendered in acceptance of the Offer will be as follows:
Each Accepting Shareholder will be:
(a)
paid S$0.41 in cash (the “Offer Price”) for each Offer Share validly tendered in
acceptance of the Offer; and
13
(b)
granted a non-transferable option to subscribe (the “Shares Option to Subscribe”
or “Shares OTS”) for Offeror Shares on the following principal terms and conditions:
(i)
the Shares Option to Subscribe will only be granted to the Accepting
Shareholder if the Offer becomes or is declared to be unconditional in all
respects in accordance with its terms;
(ii)
the Shares Option to Subscribe will be exercisable by the Accepting
Shareholder at any time during a 15 Market Day period (the “OTS Exercise
Period”), which will commence on a date to be announced by the Offeror after
the Final Settlement Date. The Offeror Shares will only be issued to the
Accepting Shareholder if the Accepting Shareholder has validly exercised the
Shares Option to Subscribe during the OTS Exercise Period. For the avoidance
of doubt, if the Shares Option to Subscribe is not validly exercised by the
Accepting Shareholder during the OTS Exercise Period, the Shares Option to
Subscribe will lapse and be null and void;
(iii) the subscription price of the Offeror Shares payable by the Accepting
Shareholder exercising the Shares Option to Subscribe will be S$11.1043 (the
“Subscription Price”) for each Offeror Share; and
(iv) the maximum number of Offeror Shares which the Accepting Shareholder may
subscribe for pursuant to the Shares Option to Subscribe will be determined as
follows (rounded down to the nearest whole Offeror Share):
Where:
“A” = Total Offer Price paid or payable to the Accepting Shareholder pursuant
to the terms of the Offer in respect of all the Offer Shares validly
tendered by such Accepting Shareholder in acceptance of the Offer
“B” = The Subscription Price
The indicative terms and conditions of the Shares Option to Subscribe are set
out in Appendix 4 to the Offer Document. Details relating to the Offeror Shares
to be issued and/or transferred pursuant to the valid exercise of the Shares
Option to Subscribe by Accepting Shareholders are set out in Section 8.3 of the
Offer Document.
Section 2.3.2 of the Offer Document further states that for purely illustrative
purposes, based on the Offer Price of S$0.41 and the Subscription Price of
S$11.1043 and assuming that the Offer becomes or is declared to be unconditional
in all respects in accordance with its terms:
(A)
If the Accepting Shareholder validly accepts the Offer in respect of 1,000 Offer
Shares, such Accepting Shareholder will receive S$410 in cash and will be
granted the Shares OTS to subscribe for up to 36 Offeror Shares at the
Subscription Price of S$11.1043 for each Offeror Share.
(B)
If the Accepting Shareholder validly accepts the Offer in respect of 10,000 Offer
Shares, such Accepting Shareholder will receive S$4,100 in cash and will be
granted the Shares OTS to subscribe for up to 369 Offeror Shares at the
14
(C) If the Accepting Shareholder validly accepts the Offer in respect of 50,000 Offer
Shares, such Accepting Shareholder will receive S$20,500 in cash and will be
granted the Shares OTS to subscribe for up to 1,846 Offeror Shares at the
2.4
No Encumbrances
Section 2.4 of the Offer Document states that the Offer Shares will be acquired (a) fully
paid, (b) free from any Encumbrances and (c) together with all rights, benefits and
entitlements attached thereto as at the Offer Announcement Date and thereafter attaching
thereto, including but not limited to the right to receive and retain all Distributions declared,
paid or made by the Company in respect of the Offer Shares on or after the Offer
Announcement Date.
2.5
Adjustment for Distributions
Section 2.5 of the Offer Document sets out the following:
Without prejudice to the foregoing, the Offer Price has been determined on the basis that
the Offer Shares will be acquired with the right to receive any Distribution that may be
declared, paid or made by the Company on or after the Offer Announcement Date.
Accordingly, in the event that any Distribution is or has been declared, paid or made by the
Company in respect of the Offer Shares on or after the Offer Announcement Date to the
Accepting Shareholder, the Offer Price payable to such Accepting Shareholder shall be
reduced by an amount which is equal to the amount of such Distribution, depending on
when the settlement date in respect of the Offer Shares tendered in acceptance of the Offer
by the Accepting Shareholder falls, as follows:
2.6
(a)
if such settlement date falls on or before the books closure date for the determination
of entitlements to the Distribution (the “Books Closure Date”), the Offer Price for
each Offer Share shall remain unadjusted and the Offeror shall pay the Accepting
Shareholder the Offer Price for each Offer Share, as the Offeror will receive the
Distribution in respect of such Offer Share from the Company; or
(b)
if such settlement date falls after the Books Closure Date, the Offer Price for each
Offer Share shall be reduced by an amount which is equal to the amount of the
Distribution in respect of such Offer Share (the Offer Price after such reduction, the
“Adjusted Offer Price”) and the Offeror shall pay the Accepting Shareholder the
Adjusted Offer Price for each Offer Share, as the Offeror will not receive the
Distribution in respect of such Offer Share from the Company.
Conditions to the Offer
Section 2.6 of the Offer Document states that the Offer is subject to the following conditions:
(a)
Level of Acceptances of the Offer. The Offeror having received, by the close of the
Offer, valid acceptances (which have not been withdrawn) in respect of such number
of Offer Shares which, when taken together with the Shares owned, controlled or
agreed to be acquired by the Offeror and parties acting in concert with it before or
during the Offer, will result in the Offeror and parties acting in concert with it holding
such number of Shares carrying more than 90 per cent. of the voting rights
attributable to all the Shares in issue as at the close of the Offer (including any voting
rights attributable to Shares (i) unconditionally issued or to be issued pursuant to the
valid conversion and/or exercise of any PCCS and/or Options prior to the final
15
Closing Date or (ii) unconditionally issued or delivered, or to be issued or delivered,
pursuant to the vesting of any Awards prior to the final Closing Date) (the
“Acceptance Condition”).
Accordingly, the Offer will not become or be capable of being declared unconditional
as to acceptances until the close of the Offer, unless at any time prior to the close of
the Offer, the Offeror has received valid acceptances (which have not been
withdrawn) in respect of such number of Offer Shares which, when taken together
with the Shares owned, controlled or agreed to be acquired by the Offeror and parties
acting in concert with it before or during the Offer, will result in the Offeror and parties
acting in concert with it holding such number of Shares carrying more than 90 per
cent. of the maximum potential issued share capital of the Company. For this
purpose, the “maximum potential issued share capital of the Company” means
the total number of Shares which would be in issue had all Shares (A) under the
PCCS and the Options been issued and (B) under the Awards been issued and/or
delivered, as at the date of such declaration.
As at the Offer Document LPD:
(b)
(1)
the Company is a subsidiary of the Offeror and the Offeror directly holds
1,393,456,041 Shares, representing approximately 55.74 per cent. of the total
number of issued Shares; and
(2)
based on the latest information available to the Offeror, the Offeror and parties
acting in concert with it hold in aggregate 1,394,106,157 Shares, representing
approximately 55.76 per cent. of the total number of issued Shares and 54.79
per cent. of the maximum potential issued share capital of the Company.
Approval-in-principle. The approval-in-principle of the SGX-ST for the dealing in,
listing of and quotation of the new Offeror Shares to be issued in connection with the
Offer and the PCCS Offer on the Official List of the SGX-ST (the “AIP”).
The Offeror has made an application to the SGX-ST for the dealing in, listing of and
quotation of the new Offeror Shares to be issued in connection with the Offer and the
PCCS Offer on the Official List of the SGX-ST and has, on 19 November 2015,
received the AIP from the SGX-ST. Accordingly, as at the Offer Document LPD, the
condition to the Offer relating to the AIP has been fulfilled and the Acceptance
Condition remains the only condition to the Offer.
Section 2.6 of the Offer Document further states that:
The Offeror reserves the right to waive the Acceptance Condition or reduce such condition
to a level equal to or less than 90 per cent. of the voting rights attributable to all the Shares
in issue as at the close of the Offer, subject to the approval of the SIC. In the event that such
revision is made during the course of the Offer, the revised Offer will remain open for at
least another 14 days and Shareholders who have accepted the initial Offer will be allowed
to withdraw their acceptances within eight (8) days of the notification of such revision.
The Offer is not subject to any other condition. In particular, the Offeror is not required to
seek the approval of its shareholders for the Offer, as noted in the announcement dated 6
November 2015 released by the Offeror on the SGX-ST in relation to the Offer.
16
2.7
Warranty
Section 2.7 of the Offer Document states that a Shareholder who tenders his Offer Shares
in acceptance of the Offer will be deemed to unconditionally and irrevocably warrant that he
sells such Offer Shares as or on behalf of the beneficial owner(s) thereof (a) fully paid, (b)
free from all Encumbrances, and (c) together with all rights, benefits and entitlements
attached thereto as at the Offer Announcement Date and thereafter attaching thereto,
including but not limited to the right to receive and retain all Distributions declared, paid or
made by the Company in respect of the Offer Shares on or after the Offer Announcement
Date.
2.8
Choices
Section 2.8 of the Offer Document states that Shareholders can, in relation to all or part of
their Offer Shares, either:
(a)
accept the Offer in respect of such Offer Shares in accordance with the procedures
set out in Appendix 2 to the Offer Document; or
(b)
take no action and let the Offer lapse in respect of their Offer Shares.
3.
THE PCCS OFFER
3.1
PCCS
Section 3 of the Offer Document states that, as at the Offer Document LPD, based on the
latest information available to the Offeror, the Company has outstanding an aggregate of
approximately S$14.3 million 1 in principal amount of 13,350,091 PCCS. The denomination
for each PCCS is S$1.07 and the PCCS are convertible into 25,282,473 new Shares at the
prevailing conversion price of S$0.565 per Share (the “PCCS Conversion Price”).
Pursuant to the terms of the PCCS:
(a)
the number of Shares to be issued upon conversion of each PCCS will be determined
by dividing the principal amount of each PCCS (being S$1.07) by the prevailing
PCCS Conversion Price;
(b)
if more than one PCCS held by the same PCCS Holder is converted at any one time,
the number of Shares to be issued to such PCCS Holder upon conversion will be
calculated by dividing the aggregate principal amount of the PCCS to be converted
by the prevailing PCCS Conversion Price; and
(c)
fractions of a Share will not be issued on conversion of the PCCS.
As at the Offer Document LPD, the PCCS, if converted at the prevailing PCCS Conversion
Price, represent approximately 0.99 per cent. of the maximum potential issued share capital
of the Company.
1
Rounded to the nearest one decimal place.
17
3.2
PCCS Offer
Section 3.2 of the Offer Document states that, in addition to extending the Offer to all new
Shares unconditionally issued or to be issued pursuant to the valid conversion of any of the
PCCS prior to the final Closing Date, in accordance with Rule 19 of the Code, DBS, for and
on behalf of the Offeror, thereby makes an offer to the PCCS Holders to acquire the PCCS,
other than those already owned or agreed to be acquired by the Offeror as at the
Commencement Date, in accordance with the terms and subject to the conditions set out
in the Offer Document.
3.3
PCCS Offer Consideration
As set out in Section 3.3 of the Offer Document, the consideration for the PCCS validly
tendered in acceptance of the PCCS Offer will be as follows:
Each Accepting PCCS Holder will be:
(a)
paid the “see-through” price (the “PCCS Offer Price”) for the PCCS validly tendered
in acceptance of the PCCS Offer in accordance with Note 1(a) on Rule 19 of the
Code. In other words, the PCCS Offer Price will be an amount in cash equal to the
Offer Price multiplied by the number of Offer Shares (rounded down to the nearest
Offer Share) which would have been issued had the PCCS been converted (based on
the aggregate principal amount of the PCCS tendered in acceptance of the PCCS
Offer); and
(b)
granted a non-transferable option to subscribe (the “PCCS Option to Subscribe” or
“PCCS OTS”) for Offeror Shares on the following principal terms and conditions:
(i)
the PCCS Option to Subscribe will only be granted to the Accepting PCCS
Holder if the Offer becomes or is declared to be unconditional in all respects in
accordance with its terms;
(ii)
the PCCS Option to Subscribe will be exercisable by the Accepting PCCS
Holder at any time during the OTS Exercise Period. The Offeror Shares will only
be issued to the Accepting PCCS Holder if the Accepting PCCS Holder has
validly exercised the PCCS Option to Subscribe during the OTS Exercise
Period. For the avoidance of doubt, if the PCCS Option to Subscribe is not
validly exercised by the Accepting PCCS Holder during the OTS Exercise
Period, the PCCS Option to Subscribe will lapse and be null and void;
(iii) the subscription price of the Offeror Shares payable by the Accepting PCCS
Holder exercising the PCCS Option to Subscribe will be the Subscription Price
for each Offeror Share; and
(iv) the maximum number of Offeror Shares which the Accepting PCCS Holder may
subscribe for pursuant to the PCCS Option to Subscribe will be determined as
follows (rounded down to the nearest whole Offeror Share):
Where:
“A” = Total PCCS Offer Price paid or payable to the Accepting PCCS Holder
pursuant to the terms of the PCCS Offer in respect of all the PCCS
validly tendered by such Accepting PCCS Holder in acceptance of the
PCCS Offer
“B” = The Subscription Price
18
The indicative terms and conditions of the PCCS Option to Subscribe are set out in
Appendix 4 to the Offer Document. Details relating to the Offeror Shares to be issued
and/or transferred pursuant to the valid exercise of the PCCS Option to Subscribe by
Accepting PCCS Holders are set out in Section 8.3 of the Offer Document.
For purely illustrative purposes only, based on the Offer Price of S$0.41, the
Subscription Price of S$11.1043 and the PCCS Conversion Price of S$0.565 and
assuming that the Offer becomes or is declared to be unconditional in all respects in
accordance with its terms:
(A)
If the Accepting PCCS Holder validly accepts the PCCS Offer in respect of 1,000
PCCS, such Accepting PCCS Holder will receive S$776.13 in cash and will be
granted the PCCS OTS to subscribe for up to 69 Offeror Shares at the
(B)
If the Accepting PCCS Holder validly accepts the PCCS Offer in respect of
10,000 PCCS, such Accepting PCCS Holder will receive S$7,764.58 in cash
and will be granted the PCCS OTS to subscribe for up to 699 Offeror Shares at
the Subscription Price of S$11.1043 for each Offeror Share.
(C) If the Accepting PCCS Holder validly accepts the PCCS Offer in respect of
50,000 PCCS, such Accepting PCCS Holder will receive S$38,822.90 in cash
and will be granted the PCCS OTS to subscribe for up to 3,496 Offeror Shares
at the Subscription Price of S$11.1043 for each Offeror Share.
3.4
Condition
Section 3.4 of the Offer Document states that the PCCS Offer will be subject to and
conditional upon the Offer becoming or being declared unconditional in all respects in
accordance with its terms.
3.5
No Encumbrances
Section 3.5 of the Offer Document states that the PCCS will be acquired (a) free from all
Encumbrances and (b) together with all rights, benefits and entitlements attached thereto
as at the date of transfer of the PCCS from the Accepting PCCS Holder to the Offeror (the
“PCCS Transfer Date”) and thereafter attaching thereto, including but not limited to the
right to receive and retain all Distributions declared, paid or made by the Company in
respect of the PCCS on or after the PCCS Transfer Date.
3.6
Offer and PCCS Offer Mutually Exclusive
Section 3.6 of the Offer Document states that whilst the PCCS Offer is conditional upon the
Offer becoming or being declared unconditional in all respects in accordance with its terms,
the Offer will not be conditional upon acceptances received in relation to the PCCS Offer.
The Offer and the PCCS Offer are separate and are mutually exclusive. The PCCS Offer
does not form part of the Offer, and vice versa.
Without prejudice to the foregoing, if a PCCS Holder converts his PCCS in order to accept
the Offer in respect of the new Shares issued pursuant to such conversion, he may not
accept the PCCS Offer in respect of such converted PCCS. Conversely, if a PCCS Holder
wishes to accept the PCCS Offer in respect of his PCCS, he should not convert those PCCS
and accept the Offer in respect of the new Shares to be issued pursuant to such conversion.
19
3.7
Warranty
Section 3.7 of the Offer Document states that a PCCS Holder who tenders his PCCS in
acceptance of the PCCS Offer will be deemed to unconditionally and irrevocably warrant
that he sells such PCCS as or on behalf of the beneficial owner(s) thereof, (a) free from all
Encumbrances and (b) together with all rights, benefits and entitlements attached thereto
as at the PCCS Transfer Date and thereafter attaching thereto, including but not limited to
the right to receive and retain all Distributions declared, paid or made by the Company on
or after the PCCS Transfer Date.
3.8
Choices
Section 3.8 of the Offer Document states that PCCS Holders can, in relation to all or part
of their PCCS:
(a)
(i) convert such PCCS in compliance with the procedures for the conversion of the
PCCS set out in the terms and conditions of the PCCS and (ii) thereafter accept the
Offer in respect of all or part of the new Shares unconditionally issued or to be issued
pursuant to such conversion, in accordance with the procedures set out in Appendix
2 to the Offer Document;
(b)
accept the PCCS Offer in respect of such PCCS in accordance with the procedures
set out in Appendix 3 to the Offer Document; or
(c)
take no action and let the PCCS Offer lapse in respect of such PCCS.
4.
THE OPTIONS PROPOSAL
4.1
Options
As at the Offer Document LPD, based on the latest information available to the Offeror,
there are 10,865 Options to subscribe for an aggregate of 10,865 Shares granted under the
Tiger Airways Scheme. Under the rules of the Tiger Airways Scheme, the Options are not
transferable by the holders thereof. 2 In view of this restriction, the Offeror will not make an
offer to acquire the Options, although, for the avoidance of doubt, the Offer will be extended
to all new Shares unconditionally issued or to be issued pursuant to the valid exercise of
any Options prior to the final Closing Date.
4.2
Options Proposal
Section 4.2 of the Offer Document states that:
DBS, for and on behalf of the Offeror, will instead make a proposal (the “Options
Proposal”) to all Optionholders, subject to:
2
(a)
the Offer becoming or being declared to be unconditional in all respects in
accordance with its terms; and
(b)
the relevant Options continuing to be exercisable into new Shares,
Except in certain limited circumstances including by will or the laws of descent and distribution.
20
where the Offeror will pay an Optionholder a cash amount (the “Options Price”) in
(i)
(ii)
not to exercise all or any of his rights as holder of the Relevant Options,
in each case from the date of his acceptance of the Options Proposal to the dates of expiry
of the respective Relevant Options. Further, subject to the Offer becoming or being declared
to be unconditional in all respects in accordance with its terms, the Relevant Options of an
Optionholder who accepts the Options Proposal will be cancelled or deemed to be
cancelled upon receipt by the Registrar, on behalf of the Offeror, of his valid acceptance of
the Options Proposal (whether or not such Relevant Options have been surrendered by the
Optionholder).
If the Offer lapses, does not become or is not declared to be unconditional in all respects
in accordance with its terms or is withdrawn, the Options Proposal will lapse accordingly.
Further, if the Relevant Options cease to be exercisable into new Shares, the Options
Proposal in relation to such Relevant Options that cease to be exercisable into new Shares
will also lapse.
4.3
Options Price
Section 4.3 of the Offer Document states that the Options Price is calculated on a
“see-through” basis on the basis of the Offer Price. In other words, the Options Price for an
Option will be the amount by which the Offer Price exceeds the subscription price of that
Option. If, however, the subscription price of an Option is equal to or more than the Offer
Price, the Options Price for such Option will be the nominal amount of S$0.001.
For the avoidance of doubt, an Optionholder who validly accepts the Options Proposal will
not receive any Option to Subscribe in respect of the Offeror Shares.
4.4
Offer and Options Proposal are Mutually Exclusive
Section 4.4 of the Offer Document states that whilst the Options Proposal is conditional
upon the Offer becoming or being declared to be unconditional in all respects in accordance
with its terms, the Offer will not be conditional upon acceptances received in relation to the
Options Proposal. The Offer and the Options Proposal are separate and are mutually
exclusive. The Options Proposal does not form part of the Offer, and vice versa.
Without prejudice to the foregoing, if an Optionholder exercises his Options in order to
accept the Offer in respect of the new Shares issued pursuant to such exercise, he may not
accept the Options Proposal in respect of such exercised Options. Conversely, if an
Optionholder wishes to accept the Options Proposal in respect of his Options, he should not
exercise those Options and accept the Offer in respect of the new Shares to be issued
pursuant to such exercise.
4.5
Further Information
Section 4.5 of the Offer Document states that a separate letter setting out further details of
the Options Proposal made by DBS, for and on behalf of the Offeror, to the Optionholders
will be despatched to the Optionholders on the Despatch Date.
21
5.
NO AWARDS OFFER
Section 5 of the Offer Document states that under the terms of the Tiger Airways RSP and
the Tiger Airways PSP, the Awards are not transferable by the holders thereof. In view of this
restriction, the Offeror will not be making an offer to acquire, or an appropriate proposal in
respect of, the Awards. For the avoidance of doubt, the Offer will be extended to all new
Shares unconditionally issued or delivered or to be issued or delivered pursuant to the
vesting of any Awards prior to the final Closing Date.
6.
OTHER TERMS OF THE OFFER AND THE PCCS OFFER
6.1
Duration of the Offer and the PCCS Offer
As set out in paragraph 1 of Appendix 1 to the Offer Document:
(a)
First Closing Date. The Offer and the PCCS Offer are open for acceptance by
Shareholders and PCCS Holders respectively for at least 28 days from the Despatch
Date, unless the Offer and the PCCS Offer are withdrawn with the consent of the SIC
and every person is released from any obligation incurred thereunder. Accordingly,
the Offer and the PCCS Offer will close at 5.30 p.m. (Singapore time) on 28
December 2015 (Monday) or such later date(s) as may be announced from time
to time by or on behalf of the Offeror.
(b)
Subsequent Closing Date(s). The Offeror is not obliged to extend the Offer and the
PCCS Offer if the conditions specified in Section 2.6 of the Offer Document are not
fulfilled or waived (as the case may be) by the Closing Date. However, if the Offer and
the PCCS Offer are extended and:
(c)
(i)
the Offer is not unconditional as to acceptances as at the date of such
extension, the announcement of the extension must state the next Closing Date;
or
(ii)
the Offer is unconditional as to acceptances as at the date of such extension,
the announcement of the extension need not state the next Closing Date but
may state that the Offer and the PCCS Offer will remain open until further
notice. In such a case, the Offeror must give Shareholders and PCCS Holders
who have not accepted the Offer and the PCCS Offer at least 14 days’ prior
notice in writing before it may close the Offer and the PCCS Offer.
Offer and PCCS Offer to Remain Open for 14 Days after Offer becomes or is
declared Unconditional as to Acceptances. In order to give Shareholders and
PCCS Holders who have not accepted the Offer and the PCCS Offer respectively the
opportunity to accept the Offer and the PCCS Offer after the Offer has become or is
declared unconditional as to acceptances, the Offer and the PCCS Offer will remain
open for a period (the “Rule 22.6 Period”) of not less than 14 days after the date on
which the Offer and the PCCS Offer would otherwise have closed.
This requirement does not apply if, before the Offer has become or is declared
unconditional as to acceptances, the Offeror has given Shareholders and PCCS
Holders, as the case may be, at least 14 days’ notice in writing (the “Shut-Off
Notice”) that the Offer and the PCCS Offer will not be open for acceptance beyond
a specified Closing Date, provided that:
(i)
the Offeror may not give a Shut-Off Notice in a competitive situation; and
22
(ii)
the Offeror may not enforce a Shut-Off Notice, if already given, in a competitive
situation.
If a declaration that the Offer is unconditional as to acceptances is confirmed in
accordance with paragraph 4.1 of Appendix 1 to the Offer Document, the Rule 22.6
Period will run from the date of such confirmation or the date on which the Offer and
the PCCS Offer would otherwise have closed, whichever is later.
(d)
Final Day Rule. The Offer (whether revised or not) will not be capable:
(i)
of becoming or being declared unconditional as to acceptances after 5.30 p.m.
(Singapore time) on the 60th day after the Despatch Date; or
(ii)
of being kept open after such 60-day period unless the Offer has previously
become or been declared to be unconditional as to acceptances,
provided that the Offeror may extend the Offer beyond such 60-day period with the
SIC’s prior consent.
Except with the SIC’s consent, all conditions must be fulfilled or the Offer must lapse
within 21 days of the first Closing Date or of the date the Offer becomes or is declared
unconditional as to acceptances, whichever is the later.
(e)
6.2
Revision. The Offeror reserves its right to revise the terms of the Offer and the PCCS
Offer at such time and in such manner as it may consider appropriate. If the Offer and
the PCCS Offer are revised, the Offer and the PCCS Offer will remain open for
acceptances for at least 14 days from the date of posting of the written notification
of the revision to Shareholders and PCCS Holders. In any case, where the terms are
revised, the benefit of the Offer and the PCCS Offer (as so revised) will be made
available to each of the Shareholders and PCCS Holders who have previously
accepted the Offer and the PCCS Offer respectively.
Details of the Offer and the PCCS Offer
The Offer and the PCCS Offer are made in accordance with the principal terms and
conditions as set out in the Offer Document. Appendix 1 to the Offer Document sets out
further details on (a) the settlement of the consideration for the Offer and the PCCS Offer,
(b) the requirements relating to the announcement of the level of acceptances of the Offer
and the PCCS Offer and (c) the right of withdrawal of acceptances of the Offer and the
PCCS Offer.
6.3
Procedures for Acceptance
Section 7 of the Offer Document states that Appendices 2 and 3 to the Offer Document set
out the procedures for acceptance of the Offer by a Shareholder and the PCCS Offer by a
PCCS Holder, respectively.
23
7.
FURTHER DETAILS RELATING TO THE OPTION TO SUBSCRIBE AND THE OFFEROR
SHARES
Further details relating to the Option to Subscribe and the Offeror Shares are set out in
Section 8 of the Offer Document which is reproduced in italics below:
“8.
FURTHER DETAILS RELATING TO THE OPTION TO SUBSCRIBE AND THE
OFFEROR SHARES
8.1
Option to Subscribe. The indicative terms and conditions of the Option to Subscribe
are set out in Appendix 4 to this Offer Document.
The consideration for the Offer and the PCCS Offer comprises cash and the Option
to Subscribe, and has been structured in this manner in order to provide greater
flexibility and value for the Accepting Shareholders and the Accepting PCCS Holders.
The Option to Subscribe is exercisable at the option of the Accepting Shareholders
and the Accepting PCCS Holders during the OTS Exercise Period, which will only
commence after the Final Settlement Date – that is, after the Offer Price and the
PCCS Offer Price have been paid in cash to all the Accepting Shareholders and
Accepting PCCS Holders. Therefore, the Accepting Shareholders and the Accepting
PCCS Holders will have the flexibility to decide how they wish to utilise their cash
consideration, whether to acquire the Offeror Shares through the exercise of the
Option to Subscribe or through the open market or not at all. This flexibility
maximises value for the Accepting Shareholders and the Accepting PCCS Holders.
The Offer Price and the PCCS Offer Price in cash will be despatched in full to all
Accepting Shareholders and Accepting PCCS Holders in respect of all their Offer
Shares and PCCS validly tendered in acceptance of the Offer and the PCCS Offer
respectively, in accordance with the settlement timetable set out in the Indicative
Timetable and also in Appendices 2 and 3 to this Offer Document. Thereafter, the
Accepting Shareholders and the Accepting PCCS Holders who wish to exercise the
Option to Subscribe may exercise the Option to Subscribe in full or in part, and have
the flexibility to choose to subscribe for whole board lots of Offeror Shares and,
accordingly, avoid being issued with odd lots of Offeror Shares which may be less
liquid than board lots of Offeror Shares.
8.2
Exercise of the Option to Subscribe. The procedures for the exercise of the Option
to Subscribe will be set out in the terms and conditions of the Option to Subscribe and
the OTS Exercise Notice which will be despatched to the Accepting Shareholders
and the Accepting PCCS Holders within 15 Market Days after the Final Settlement
Date.
8.3
Offeror Shares. The Offeror Shares to be issued and/or transferred upon the valid
exercise of the Option to Subscribe by the Accepting Shareholders and the Accepting
PCCS Holders are intended to be satisfied first from the Offeror’s existing Offeror
Shares held in treasury and thereafter from newly issued Offeror Shares. All such
Offeror Shares to be issued and/or transferred will be credited as fully paid and free
from all Encumbrances and will rank pari passu in all respects with the existing
Offeror Shares as at the date of their issue and/or transfer.
As stated in Section 2.6.2 above, the Offeror has obtained the AIP from the SGX-ST
for the dealing in, listing of and quotation of the new Offeror Shares on the Official
List of the SGX-ST.
24
Assuming (i) all the Shares under the Options and PCCS are issued and all the
Shares under the Awards are issued and/or delivered, (ii) all Shareholders (other
than the Offeror) validly accept the Offer and (iii) all the Accepting Shareholders
validly exercise the Shares Option to Subscribe, the Offeror will issue and/or transfer
approximately 42,494,815 Offeror Shares (comprising 30,000,000 treasury Offeror
Shares and 12,494,815 new Offeror Shares), representing approximately 3.7 per
cent. of the ordinary share capital of the Offeror as at the Latest Practicable Date.”
8.
DESCRIPTION OF THE OFFEROR
The description of the Offeror is set out in Section 9 of the Offer Document which is
reproduced in italics below:
“The Offeror is a company incorporated in the Republic of Singapore on 28 January 1972
and listed on the Mainboard of the SGX-ST on 18 December 1985. The Offeror is a
Singapore-based airline company which, together with its subsidiaries, provides global
passenger and cargo air transportation services and airline related services.
For FY2015, the SIA Group had revenues of S$15,565.5 million and NPBT of S$408.4
million, with net assets of S$12,463.6 million as at the end of FY2015.
As at the Latest Practicable Date, the directors of the Offeror are Stephen Lee Ching Yen,
Peter Seah Lim Huat, Goh Choon Phong, Gautam Banerjee, William Fung Kwok Lun, Hsieh
Tsun-yan, Christina Ong, Helmut Gunter Wilhelm Panke and Lucien Wong Yuen Kuai.”
Additional information on the Offeror is set out in Appendix 5 to the Offer Document.
9.
OFFEROR’S RATIONALE AND INTENTIONS
9.1
Rationale for the Offer
The rationale for the Offer is set out in Section 11 of the Offer Document which is
reproduced in italics below:
“11.
RATIONALE FOR THE OFFER
The Offeror believes that the Offer will be beneficial to all stakeholders of both SIA
and Tiger Airways for the following reasons:
Opportunity for Shareholders to Realise their Investment in Cash at a
Compelling Price
The Offer provides an opportunity for Shareholders who wish to realise their
investment in the Shares to do so in cash, at a compelling premium to prevailing
market prices and without incurring brokerage fees.
(i)
3
The Offer Price represents a premium of approximately: (a) 32 per cent. over
the last traded price per Share on the Last Trading Day of S$0.310; (b) 35 per
cent. over the VWAP of the Shares for the one-month period up to and including
the Last Trading Day of S$0.303; and (c) 42 per cent. over the VWAP of the
Shares for the three-month period up to and including the Last Trading Day of
S$0.288. 3
Based on data extracted from Bloomberg L.P. which shows prices adjusted to reflect any changes in the share
capital of Tiger Airways due to rights issues.
25
(ii)
The Offer Price also represents a premium of approximately 15 per cent. to the
highest closing price of the Shares in the one-year period up to and including
the Last Trading Day of S$0.355 and exceeds the highest closing price of the
Shares in the period commencing from 16 June 2014 and up to and including
the Last Trading Day. 4
Premium over historical prices 5
Offer Price: S$0.41 per Offer Share
Opportunity for the Accepting Shareholders and the Accepting PCCS Holders
to Remain Invested in the Long-term Prospects of the SIA Group
The Accepting Shareholders and the Accepting PCCS Holders who wish to remain
invested in the long-term prospects of the SIA Group can, subject to the Offer
becoming or being declared to be unconditional in all respects in accordance with its
terms, exercise the Option to Subscribe.
The Subscription Price of the Offeror Shares will be S$11.1043 per Offeror Share,
which is equivalent to the VWAP of the Offeror Shares of S$11.1043 on the Last
Trading Day.
SIA believes that given the intense competition in the low-cost airline industry, the
enhanced benefits that will result from Tiger Airways being fully part of the SIA
Group’s portfolio will help ensure that Tiger Airways has a strong future and provide
new opportunities for growth. The Option to Subscribe also provides Shareholders
and PCCS Holders with an opportunity to share in the future of Tiger Airways through
a stake in SIA.
Allow SIA to Harness Full Synergies to Benefit the SIA Group and the Singapore
Hub
SIA intends to delist Tiger Airways and thereby enable full synergies between Tiger
Airways and other airlines in the SIA Group, through seamless cooperation in all
aspects of the business including commercial activities, network coordination and
operational and backroom areas.
4
5
26
This will allow SIA to accelerate and strengthen the benefits to the SIA Group’s
portfolio strategy, thus enabling the SIA Group to remain flexible and nimble in
tapping into market segments that would not otherwise be available to the SIA Group,
providing new revenue and profit generation opportunities.
Tiger Airways is currently a listed subsidiary of SIA, and has realised some, but not
all, of the synergies and benefits of being integrated with the SIA Group. Some
benefits to Tiger Airways from being part of the SIA Group have already been
demonstrated, for example, the enhanced ties to Scoot and membership in the
KrisFlyer frequent-flyer programme. SIA is confident that full integration of Tiger
Airways with the SIA Group would lead to more benefits, including closer
collaboration with all other airlines in the SIA Group, thereby developing further the
strength of Singapore as an aviation hub.
Allow Tiger Airways to Secure Necessary Support for Long-Term Growth
SIA believes that the prospects for Tiger Airways to sustain independent growth in
the current competitive environment are limited. SIA believes that Tiger Airways, as
an independent airline, lacks the scale and network to respond comprehensively to
changes in the expanding but intensely competitive low-cost carrier segment of the
industry.
SIA further believes that the SIA Group is the best option for Tiger Airways to secure
the support necessary to strengthen Tiger Airways’ prospects. The objective is to
achieve a beneficial outcome for both Tiger Airways and the SIA Group:
(i)
Tiger Airways will benefit from being fully part of the SIA Group, with enhanced
synergies that will help it deliver growth and ensure that it has a strong future.
(ii)
The SIA Group will benefit from being able to realise the full extent of synergies
within the SIA Group’s portfolio, through which all key market segments are
served, particularly so through the further development of ties between Tiger
Airways and Scoot. Tiger Airways and Scoot will be able to grow more
effectively together than either would be able to independently.
However, for as long as Tiger Airways operates as a separate listed entity, the above
benefits cannot be fully realised as efforts to fully integrate Tiger Airways’ operations
and commercial activities with those of the SIA Group would remain subject to Tiger
Airways’ separate evaluation, which may not always align with the wider long term
considerations of the SIA Group. Tiger Airways’ status as a separate listed entity may
impede SIA’s ability to allocate management and financial resources to Tiger
Airways, and in turn may adversely affect Tiger Airways’ recovery and its ability to
respond swiftly and comprehensively to changes in the expanding but intensely
competitive low-cost carrier segment of the airline industry.
Full integration with the SIA Group would enable SIA to make available to Tiger
Airways open access to the network and resources of the SIA Group, and require SIA
to make substantial investments in systems and commitment of resources. The SIA
Group is not prepared to enable such open access nor commit these substantial
investments without a higher shareholding in Tiger Airways, and the assurance of a
delisted Tiger Airways which SIA is able to manage in an integrated manner.
27
SIA has demonstrated that it is committed to the development of Tiger Airways, and
has consistently provided financial and other support. This includes converting its
PCCS at a conversion price higher than the then-prevailing market price in 2014, and
consistently being the single largest subscriber in every rights issue undertaken by
Tiger Airways.
Hence, in making the Offer, SIA seeks the best interest of Tiger Airways and believes
the Offer will improve the competitive positioning of Tiger Airways and the SIA Group.
Allow the Management of Tiger Airways to Enjoy Better Flexibility and Potential
Cost Savings
The delisting will provide Tiger Airways with better flexibility to manage its operations
and develop its existing business in collaboration with the SIA Group, without the
attendant cost, regulatory restrictions and compliance issues associated with its
listed status on the SGX-ST.
The delisting will also allow Tiger Airways to dispense with expenses and
management effort relating to the maintenance of its listed status.
Low Trading Liquidity of the Shares
The trading liquidity of the Shares has been low. The average daily trading volume
of the Shares for the one-month, three-month, six-month and 12-month periods
preceding the Offer Announcement Date represents less than 0.3 per cent. of the
total number of issued Shares.
Average daily trading
volume as a percentage
of total number of issued
Shares (1)
1 Month
(%)
3 Months
(%)
6 Months
(%)
12 Months
(%)
0.146
0.148
0.152
0.278
Note:
(1)
Based on data extracted from Bloomberg L.P. which shows volumes adjusted to reflect any
changes in the share capital of Tiger Airways due to rights issues, rounded to the nearest
three decimal places.
The Offer therefore represents a clean cash exit opportunity for Shareholders to
realise their entire investment in the Shares at a premium over the market prices of
the Shares during the 12-month period prior to the Offer Announcement Date, an
opportunity that may not otherwise be available due to the low trading liquidity of the
Shares.”
28
9.2
The Offeror’s Intentions for the Company
The Offeror’s intentions for the Company is set out in Section 12 of the Offer Document
which is reproduced in italics below:
“12.
THE OFFEROR’S INTENTIONS FOR THE COMPANY
12.1 The Offeror’s Future Plans for the Company. It is the intention of the Offeror that
Tiger Airways continues to develop its airline business, including the realisation of
potential commercial and operational synergies with the SIA Group while continuing
to maintain the respective mission-critical services and resources of Tiger Airways
and the SIA Group.
The Offeror will, following the close of the Offer, conduct a review of Tiger Airways’
operations with the aim of integrating them into the SIA Group so as to generate
sustainable long-term returns. The review may comprise, inter alia, existing joint
initiatives and areas of cooperation between Tiger Airways and the SIA Group, as
well as identifying new areas of integration in which commercial and operational
synergies can be achieved. In connection with such integration plans, the Offeror
may also consider putting in place suitable arrangements to transition the Awards
granted under the Tiger Airways RSP and the Tiger Airways PSP schemes as
appropriate.
The Offeror retains the flexibility at any time to consider any options or opportunities
which may present themselves and which may be regarded to be in the interests of
the SIA Group and Tiger Airways.
Save as disclosed above and other than in the ordinary course of business, the
Offeror currently has no plans to (i) introduce any major changes to the business of
Tiger Airways, (ii) re-deploy the fixed assets of Tiger Airways, (iii) downsize Tiger
Airways’ operations or (iv) carry out a retrenchment exercise in connection with the
Offer.
12.2 Listing Status of the Company. Under Rule 1105 of the Listing Manual, upon
announcement by the Offeror that acceptances have been received that bring the
holdings of the Shares owned by the Offeror and parties acting in concert with the
Offeror to above 90 per cent. of the total number of issued Shares (excluding treasury
Shares), the SGX-ST may suspend the trading of the listed securities of the
Company on the SGX-ST until such time when the SGX-ST is satisfied that at least
10 per cent. of the total number of issued Shares (excluding treasury Shares) are
held by at least 500 Shareholders who are members of the public. Under Rule
1303(1) of the Listing Manual, where the Offeror succeeds in garnering acceptances
exceeding 90 per cent. of the total number of issued Shares (excluding treasury
Shares), thus causing the percentage of the total number of issued Shares
(excluding treasury Shares) held in public hands to fall below 10 per cent., the
SGX-ST will suspend trading of the listed securities of the Company at the close of
the Offer.
Shareholders are advised to note that Rule 723 of the Listing Manual requires the
Company to ensure that at least 10 per cent. of the total number of issued Shares
(excluding treasury Shares) is at all times held by the public (the “Free Float
Requirement”). In addition, under Rule 724 of the Listing Manual, if the percentage
of the total number of issued Shares (excluding treasury Shares) held in public hands
falls below 10 per cent., the Company must, as soon as practicable, announce that
fact and the SGX-ST may suspend trading of all securities of the Company on the
29
SGX-ST. Rule 724 of the Listing Manual further states that the SGX-ST may allow the
Company a period of three months, or such longer period as the SGX-ST may agree,
for the percentage of the total number of issued Shares (excluding treasury Shares)
held by members of the public to be raised to at least 10 per cent., failing which the
Company may be removed from the Official List of the SGX-ST.
In the event the Company does not meet the Free Float Requirement, the
Offeror does not intend to preserve the listing status of the Company and does
not intend to take any steps for any trading suspension in the securities of the
Company to be lifted.
12.3 Compulsory Acquisition. Pursuant to Section 215(1) of the Companies Act, if the
Offeror receives valid acceptances of the Offer and/or acquires such number of Offer
Shares from the Commencement Date otherwise than through valid acceptances of
the Offer in respect of not less than 90 per cent. of the total number of Shares in issue
(excluding treasury Shares) as at the final Closing Date (other than those already
held by the Offeror, its related corporations or their respective nominees as at the
Commencement Date), the Offeror would be entitled to exercise the right to
compulsorily acquire all the Offer Shares of the Shareholders who have not accepted
the Offer (the “Dissenting Shareholders”) on the same terms as those offered under
the Offer.
In such event, the Offeror intends to exercise its right to compulsorily acquire
all the Offer Shares not acquired under the Offer. The Offeror will then proceed
to delist the Company from the SGX-ST.
Dissenting Shareholders have the right under and subject to Section 215(3) of the
Companies Act, to require the Offeror to acquire their Shares in the event that the
Offeror, its related corporations or their respective nominees acquire, pursuant to the
Offer, such number of Shares which, together with the Shares held by the Offeror, its
related corporations or their respective nominees, comprise 90 per cent. or more of
the total number of issued Shares (excluding treasury Shares) as at the final Closing
Date. Dissenting Shareholders who wish to exercise such right are advised to
seek their own independent legal advice. Unlike Section 215(1) of the Companies
Act, the 90 per cent. threshold under Section 215(3) of the Companies Act does not
exclude Shares held by the Offeror, its related corporations or their respective
nominees as at the Commencement Date.
Subject to the relevant provisions of the Companies (Amendment) Act 2014 (the
“Relevant Legislative Amendment”) coming into force, the compulsory acquisition
procedure under Section 215 of the Companies Act will be extended to include “units
of shares”, such as the PCCS. As at the Latest Practicable Date, the Relevant
Legislative Amendment has not yet come into force. Subject to the Relevant
Legislative Amendment coming into force, in the event that the Offeror receives valid
acceptances of the PCCS Offer and/or acquires such number of PCCS from the
Commencement Date otherwise than through valid acceptances of the PCCS Offer
in respect of not less than 90 per cent. of the total number of PCCS that remains
outstanding as at the final Closing Date (other than those already held by the Offeror,
its related corporations or their respective nominees as at the Commencement Date),
the Offeror would be entitled to exercise the right to compulsorily acquire all the
PCCS of the PCCS Holders who have not accepted the PCCS Offer (the “Dissenting
PCCS Holders”) on the same terms as those offered under the PCCS Offer.
In such event, the Offeror intends to exercise its right to compulsorily acquire
all the PCCS not acquired under the PCCS Offer.
30
Further, subject to the Relevant Legislative Amendment coming into force, the
Dissenting PCCS Holders will also have the right under and subject to Section 215(3)
of the Companies Act (as amended by the Relevant Legislative Amendment) to
require the Offeror to acquire their PCCS in the event that the Offeror, its related
corporations or their respective nominees acquire, pursuant to the PCCS Offer, such
number of PCCS which, together with the PCCS held by the Offeror, its related
corporations or their respective nominees, comprise 90 per cent. or more of the total
number of PCCS that remains outstanding as at the final Closing Date. Dissenting
PCCS Holders who wish to exercise such right (if and when applicable) are
advised to seek their own independent legal advice.”
10.
DIRECTORS’ INTERESTS
Details of the Directors including, inter alia, the Directors’ direct and deemed interests in the
Company Securities, the Awards and Offeror Securities as at the Latest Practicable Date
are set out in Appendix II to this Circular.
11.
ADVICE AND RECOMMENDATION IN RELATION TO THE OFFER, THE PCCS OFFER
AND THE OPTIONS PROPOSAL
11.1
Appointment of Independent Financial Adviser
MKES has been appointed as the independent financial adviser to the Independent
Directors in respect of the Offer, the PCCS Offer and the Options Proposal.
11.2
Independent Directors
Mr Hsieh Fu Hua, Mr Lang Tao Yih, Arthur and Mr Yap Chee Keong are independent for the
purposes of the Offer, the PCCS Offer and the Options Proposal and are required to make
a recommendation to Shareholders, PCCS Holders and Optionholders in respect of the
Offer, the PCCS Offer and the Options Proposal respectively.
Pursuant to rulings given by the SIC, the Directors listed in sub-sections (a) to (f) below will
be exempted from the requirement of making a recommendation to Shareholders, PCCS
Holders and Optionholders on the Offer, the PCCS Offer and the Options Proposal
respectively, for the following reasons:
(a)
Mr Ng Chin Hwee is a Non-Independent and Non-Executive Director of the Company.
He is also the Executive Vice President, Human Resources and Operations of the
Offeror. He is a director or the chairman of various entities within the Offeror group
of companies, including SIA Engineering Company Limited, NokScoot Airlines
Company Limited, Scoot Pte Ltd and Singapore Airlines Cargo Pte Ltd;
(b)
Mr Sirisena Mervyn s/o Piankara Mestrige is a Non-Independent and Non-Executive
Director of the Company. He retired as the Senior Vice President, Engineering of the
Offeror recently on 11 June 2015. He is chairman of various entities within the Offeror
group of companies, including Aviation Partnership (Philippines) Corporation and SIA
Engineering (Philippines) Corporation;
(c)
Mr Yeap Beng Hock Gerard is a Non-Independent and Non-Executive Director of the
Company. He retired as the Senior Vice President, Flight Operations of the Offeror
recently on 19 October 2015;
31
(d)
Mr Lee Chong Kwee is a Non-Independent and Non-Executive Director of the
Company. On 10 April 2015, the Company announced that Mr Lee Chong Kwee has
been re-designated from Independent Director to Non-Independent and NonExecutive Director of the Company. Mr Lee Chong Kwee is a nominee of the Offeror
on the Board; and
(e)
Ms Chong Phit Lian is a Non-Independent and Non-Executive Director of the
Company. On 10 April 2015, the Company announced that Ms Chong Phit Lian has
been re-designated from Independent Director to Non-Independent and NonExecutive Director of the Company. Ms Chong Phit Lian is a nominee of the Offeror
on the Board;
accordingly, each of Mr Ng Chin Hwee, Mr Sirisena Mervyn s/o Piankara Mestrige, Mr Yeap
Beng Hock Gerard, Mr Lee Chong Kwee and Ms Chong Phit Lian is a party presumed to be
acting in concert with the Offeror under the Code and would face, or may reasonably be
perceived to face, a conflict of interest, that would render each of them inappropriate to join
the remainder of the Directors in making a recommendation on the Offer; and
(f)
Mr Lee Lik Hsin, an Executive Director and the Chief Executive Officer of the
Company, had served on the Board between July 2013 and May 2014 as a
representative of the Offeror. Mr Lee Lik Hsin had previously held various senior
management positions in the Offeror and continues to hold interests in outstanding
Offeror Options, conditional awards granted under the SIA RSP and SIA PSP and
conditional awards of deferred Offeror Shares (details of Mr Lee Lik Hsin’s interests
in such Offeror Securities are set out in paragraph 4.3 of Appendix II to this Circular);
accordingly, Mr Lee Lik Hsin would face, or may reasonably be perceived to face, a conflict
of interest, that would render him inappropriate to join the remainder of the Directors in
making a recommendation on the Offer.
Nonetheless, all the Directors are jointly and severally responsible for the accuracy of facts
stated and the completeness of the information given by the Company to Shareholders,
PCCS Holders and Optionholders, including information contained in announcements and
documents issued by or on behalf of the Company in connection with the Offer and the
PCCS Offer.
11.3
MKES’ Advice to the Independent Directors
The advice of MKES to the Independent Directors in respect of the Offer, the PCCS Offer
and the Options Proposal is set out in the IFA Letter annexed as Appendix I to this Circular.
(a)
Considerations in relation to the Offer
Some of the considerations relied upon by MKES in arriving at its advice to the
Independent Directors are set out in paragraph 11 of the IFA Letter. The reproduction
of certain paragraphs of these considerations is set out below and should be read in
conjunction with, and in the context of, the full text of the IFA Letter.
(i)
Listing Status and Suspension of Trading
As stated in the Offer Document, the Offeror intends to make the Company its
wholly-owned subsidiary and does not intend to preserve the listing status of the
Company. Accordingly, the Offeror when entitled, intends to exercise its rights
of compulsory acquisition under Section 215(1) of the Companies Act and does
32
not intend to take steps for any trading suspension of the Shares by the SGX-ST
to be lifted in the event that, inter alia, less than 10% of the Shares (excluding
treasury shares) are held in public hands.
(ii)
Compulsory Acquisition
Pursuant to Section 215(1) of the Companies Act, if the Offeror receives valid
acceptances of the Offer and/or acquires such number of Offer Shares from the
Commencement Date otherwise than through valid acceptances of the Offer in
respect of not less than 90 per cent. of the total number of Shares in issue
(excluding treasury Shares) as at the final Closing Date (other than those
already held by the Offeror, its related corporations or their respective nominees
as at the Commencement Date), the Offeror would be entitled to exercise its
right to compulsorily acquire all the Offer Shares of the Shareholders who have
not accepted the Offer on the same terms as those offered under the Offer.
In such event, the Offeror intends to exercise its right to compulsorily
acquire all the Offer Shares not acquired under the Offer. The Offeror will
then proceed to delist the Company from the SGX-ST.
Subject to the relevant provisions of the Companies (Amendment) Act 2014 (the
“Relevant Legislative Amendment”) coming into force, the compulsory
acquisition procedure under Section 215 of the Companies Act will be extended
to include “units of shares”, such as the PCCS. As at the Latest Practicable
Date, the Relevant Legislative Amendment has not yet come into force. Subject
to the Relevant Legislative Amendment coming into force, in the event that the
Offeror receives valid acceptances of the PCCS Offer and/or acquires such
number of PCCS from the Commencement Date otherwise than through valid
acceptances of the PCCS Offer in respect of not less than 90 per cent. of the
total number of PCCS that remains outstanding as at the final Closing Date
(other than those already held by the Offeror, its related corporations or their
respective nominees as at the Commencement Date), the Offeror would be
entitled to exercise the right to compulsorily acquire all the PCCS of the PCCS
Holders who have not accepted the PCCS Offer on the same terms as those
offered under the PCCS Offer.
In such event, the Offeror intends to exercise its right to compulsorily
acquire all the PCCS not acquired under the PCCS Offer.
(iii) Implications of Delisting for Shareholders
Shareholders should note that shares of unlisted companies are generally
valued at a discount to the shares of comparable listed companies as a result
of the lack of marketability. Following the Proposed Delisting (as defined in the
IFA Letter), it is likely to be difficult for Shareholders who do not accept the Offer
to sell their Shares in the absence of a public market for the Shares as there is
no arrangement for Shareholders to exit. If the Company is delisted, even if
such Shareholders were able to sell their Shares, they may receive a lower price
as compared to the Offer Price. Further, any transfer or sale of Shares
represented by share certificates will be subject to stamp duty.
33
(iv) Revision
We note that the Offeror reserves its right to revise the terms of the Offer and
the PCCS Offer at such time and in such manner as it may consider appropriate.
If the Offer and the PCCS Offer are revised, the Offer and the PCCS Offer will
remain open for acceptances for at least 14 days from the date of posting of the
written notification of the revision to Shareholders and PCCS Holders. In any
case, where the terms are revised, the benefit of the Offer and the PCCS Offer
(as so revised) will be made available to each of the Shareholders and PCCS
Holders who have previously accepted the Offer and the PCCS Offer
respectively.
Shareholders who are in doubt of their position should seek independent
professional advice.
(b)
Conclusion and Recommendation of MKES
The conclusion and recommendation of MKES in respect of the Offer, the PCCS Offer
and the Options Proposal has been extracted from the IFA Letter and is reproduced
in italics below. Unless otherwise defined, all terms and expressions used in the
extract below shall have the same meanings as those defined in the IFA Letter.
“12
CONCLUSION AND RECOMMENDATION
This summary should be read in conjunction with, and in the context of, the
full text of this letter. In arriving at our advice in respect of the Offer, PCCS
Offer and Options Proposal, we have taken into account, inter alia, the
following key considerations summarised below:
12.1 Offer
(a)
The closing prices of the Shares have been recorded in a band
between S$0.245 and S$0.365 per Share over the one-year period
prior to and including the Last Trading Day. The Shares have not
traded above the Offer Price during the one-year period prior to and
including the Last Trading Day. The Offer Price represents a premium
of 12.3% over the highest closing price of S$0.365 per Share and
67.3% premium over the lowest closing price of S$0.245 per Share
recorded in the one-year period prior to and including the Last Trading
Day;
(b)
The Company’s daily closing share prices have been recorded in a
band between S$0.405 and S$0.415 per Share in the period between
the Offer Announcement Date and the Latest Practicable Date. The
total volume transacted at S$0.415 per Share between the Offer
Announcement Date and the Latest Practicable Date is approximately
13.1 million Shares which amounts to approximately 0.5% of the total
number of issued Shares of the Company and approximately 4.6% of
the total number of Shares transacted during the said period;
34
6
(c)
Based on our comparison of the Offer Price against the Company’s
VWAP over the various timeframes, the Offer Price represents a
premia of approximately 33.1%, 36.7%, 42.4% and 35.3% over the
VWAP of the Shares for the one-year, six-month, three-month and
one-month periods prior to and including the Last Trading Day,
respectively. The Offer Price represents a premium of 32.3% over the
last traded price of the Shares on the Last Trading Day;
(d)
In the one-year period up to and including the Last Trading Day and
the Latest Practicable Date, the Company’s average daily trading
volume as a percentage of its free float and average daily trading value
as a percentage of its market capitalisation is above the mean and the
median liquidity measure of the top 15 largest companies by market
capitalisation traded on the SGX-ST. In the one-year period up to and
including the Last Trading Day and the Latest Practicable Date, the
Company’s average daily trading volume as a percentage of its free
float is above the mean and the median liquidity measure and the
average daily traded value as a percentage of its market capitalisation
is within the range exhibited by the SGX-ST listed companies with
market capitalisation of between S$900 million and S$1,100 million as
at the Latest Practicable Date, excluding the Company. The analysis
suggests that the trading of the Shares does not suffer from illiquid
trading conditions and that the historical market price of the Shares
provides a meaningful reference point for comparison with the Offer
Price;
(e)
The premia implied by the total of the Offer Price over the one-month,
three-month and six-month VWAP of the Shares prior to and including
the Last Trading Day, are above the mean and the median premia as
implied by the respective offer prices in respect of the Precedent
Privatisations;
(f)
The equivalent LTM 6 EV/EBITDA, LTM 6 AEV/EBITDAR and P/B
multiples for the Company implied by the Offer Price are above the
mean and median indicated by the Comparable Companies set out in
this letter. The equivalent LTM 6 EV/Revenue multiple for the Company
implied by the Offer Price is within the range indicated by the
Comparable Companies set out in this letter;
(g)
The equivalent LTM 6 EV/EBITDA and P/B multiples for the Company
implied by the Offer Price are above the mean and median indicated by
the Precedent Transactions set out in this letter. The equivalent LTM 6
EV/Revenue multiple for the Company implied by the Offer Price is
within the range indicated by the Precedent Transactions set out in this
letter;
Refers to last twelve months ended 30 September 2015
35
(h)
Offer Price represents a premium of 42.6% to the average Share price
target estimates of S$0.29 by research brokers as at the Last Trading
Day, according to Bloomberg L.P., Thomson Research and research
reports available to us. Offer Price represents a premium of 13.9% to
the average Share price target estimates by research brokers as at the
Latest Practicable Date based on broker research price targets
released between the Offer Announcement Date and the Latest
Practicable Date, according to Bloomberg L.P., Thomson Research
and research reports available to us;
(i)
With respect to the Option to Subscribe, it is personal to the Accepting
Shareholder/Accepting PCCS Holder to whom it is granted and shall
not be transferred, charged, assigned, pledged or otherwise disposed
of, in whole or in part, unless with the prior approval of SIA. The
Accepting Shareholder/Accepting PCCS Holder who is granted such
option would not be able to monetize the Option to Subscribe in the
open market;
a.
the Option to Subscribe represents an investment decision for the
Accepting Shareholders and Accepting PCCS Holders that is
separate from the decision as to whether to accept the Offer; and
b.
the Offeror Share price as at the Latest Practicable Date is below
the Subscription Price. Investors may not be able to realize value
immediately upon exercise of Option to Subscribe when the
prevailing market price of the Offeror Share is below Subscription
Price, as such investors can purchase the Offeror Shares at a
lower price on market.
(j)
As at the Latest Practicable Date, the Offeror holds approximately
55.74% of the total number of issued Shares and is in a position to
exert significant control over the Company, including passing of
ordinary resolutions;
(k)
We note that the Offeror has reserved the right to waive the
Acceptance Condition or reduce such condition to a level equal to or
less than 90 per cent. of the voting rights attributable to all the Shares
in issue as at the close of the Offer, subject to the approval of the SIC;
(l)
We note that the Offeror reserves its right to revise the terms of the
Offer and the PCCS Offer at such time and in such manner as it may
consider appropriate. As informed by the Directors, the Company has
not received an enhancement or revision of the Offer as at the Latest
Practicable Date and there is no certainty that such a revision will be
made;
(m) As informed by the Directors, the Company has not received any
competing offer and there is no publicly available evidence of an
alternative offer for the Shares from any third party as at the Latest
Practicable Date. In the event of an alternative or competing offer, we
note that unless the Offeror accepts such alternative or competing
offer, any offer made by any third parties would not be capable of
becoming unconditional;
36
(n)
If the Offeror succeeds in garnering acceptances such that less than
10% of the total number of issued Shares remains in the public hands,
the SGX-ST will suspend the trading of the Shares. Those
shareholders who did not accept the Offer would be unable to sell
shares on the SGX-ST;
(o)
Discussions with representatives of the Company;
(p)
Review of relevant Company announcement and fillings; and
(q)
Other relevant considerations.
12.2 PCCS Offer
7
(a)
With respect to the PCCS Offer, as the PCCS Offer Price is calculated
on the basis of a “see-through” price, the consideration a PCCS Holder
would receive from accepting the PCCS Offer would be the same as if
the PCCS Holder were to convert the PCCS to Shares in the Company
and accept the Offer. Accordingly, our analysis and conclusion with
respect to the Offer Price and the Option to Subscribe will similarly be
relevant to the PCCS Holders;
(b)
The PCCS Offer Price represents a premium of approximately 21.1%,
21.1%, 27.7% and 23.1% over the average trading price of the PCCS
for the one-year, six-month, three-month and one-month periods prior
to and including the Last Trading Day respectively 7;
(c)
The PCCS Offer Price represents a premium of approximately 28.3%
over the last traded price of the PCCS on the SGX-ST as at 23 October
2015 7;
(d)
The PCCS Offer Price represents a premium of approximately 2.2%
over the last traded price of the PCCS on the SGX-ST on the Latest
Practicable Date 7;
(e)
Following the close of the Offer and PCCS Offer, should the Shares be
delisted, there will be no clear market price for the underlying Shares
of the PCCS;
(f)
The PCCS is a perpetual security in respect of which there is no fixed
redemption date, hence, the PCCS does not provide PCCS Holders
with the ability to redeem at the principal amount;
(g)
Ordinary PCCS distribution rate is 2% p.a. in respect of the period from
(and including) the issue date of the PCCS to (but excluding) the
ordinary PCCS distribution payment date falling five years from the
Step Down Date; and is 0% p.a. from (and including) the Step Down
Date onward. No ordinary PCCS distribution shall accrue in respect of
any period from (and including) the Step Down Date.
According to the illustration provided in the Offer Document, in respect of 10,000 PCCS.
37
12.3 Options Proposal
We note that as the Options Price is calculated on a “see-through” basis,
the consideration an Optionholder would receive from accepting the
Options Proposal would be the same as if the Optionholder were to convert
the Options and accept the Offer. Accordingly, our analysis and conclusion
with respect to the Offer Price will similarly be relevant to the Optionholders.
12.4 Recommendation
Having considered the aforesaid points including the various factors as set
out in this letter and information made available to us as at the Latest
Practicable Date, we are of the opinion that the financial terms of the
Offer are, on balance, fair and reasonable.
Based on our opinion, we advise the Independent Directors to
recommend that Shareholders accept the Offer, unless Shareholders
are able to obtain a price higher than the Offer Price on the open
market, taking into account all brokerage commissions or transaction
costs in connection with open market transactions.
Having also considered these points including the various factors as set out
in this letter and information made available to us as at the Latest
Practicable Date, we are of the opinion that the financial terms of the
PCCS Offer are, on balance, fair and reasonable.
We also note that as the PCCS Offer Price is calculated on a “see-through”
basis, the consideration a PCCS Holder would receive from accepting the
PCCS Offer would be the same as if the PCCS Holder were to convert the
PCCS and accept the Offer. Our advice to Shareholders with respect to the
Offer is applicable to PCCS Holders. Accordingly, we advise the
Independent Directors to recommend that PCCS Holders accept the
PCCS Offer or sell their PCCS or Shares, after converting their PCCS,
in the open market if they can obtain a price higher than the Offer Price
after taking into account all brokerage commissions or transaction
costs in connection with open market transactions.
The Accepting Shareholders and the Accepting PCCS Holders will have the
flexibility to decide how they wish to utilise their cash consideration,
whether to acquire the Offeror Shares through the exercise of the Option to
Subscribe or through the open market or not at all. Accepting Shareholders
and the Accepting PCCS Holders who wish to remain invested in the
long-term prospects of the SIA Group and share in the future of Tiger
Airways through a stake in SIA can, subject to the Offer becoming or being
declared to be unconditional in all respects in accordance with its terms,
exercise the Option to Subscribe.
The decision to exercise the Option to Subscribe represents an investment
decision for the Accepting Shareholders and Accepting PCCS Holders that
is separate from the decision on whether to accept the Offer, and is subject
to various factors, including but not limited to investment objectives of each
Accepting Shareholder and Accepting PCCS Holder.
38
As each Shareholder and PCCS Holder would have different
investment objectives and profiles, we would advise the Independent
Directors to recommend that any individual Shareholder and PCCS
Holder who may require specific advice in relation to his or her
investment objectives or portfolio should consult his or her
stockbroker, bank manager, solicitor, accountant or other professional
advisers immediately.
As the Offer is being extended on the same terms and conditions to all new
Shares unconditionally issued or to be issued pursuant to the valid exercise
prior to the close of the Options Proposal, we recommend that the
Independent Directors provide the same advice to the Optionholders whose
exercise price is lower than the Offer Price as is provided to the
Shareholders.
In respect of the Options Proposal, we note that as the Options Price
is calculated on a “see-through” basis, the consideration an
Optionholder would receive from accepting the Options Proposal
would be the same as if the Optionholder were to convert the Options
and accept the Offer. Our advice to Shareholders with respect to the
Offer is applicable to Optionholders. Accordingly, we advise the
Independent Directors to recommend Optionholders to accept the
Options Proposal or sell their Shares, after exercising their Options, in
the open market if they can obtain a price higher than the Offer Price
after deducting expenses.”
Shareholders, PCCS Holders and Optionholders should read and consider carefully
all the considerations relied upon by MKES, in arriving at its advice to the
Independent Directors, in conjunction with and in the context of the full text of the IFA
Letter.
11.4
Recommendation of the Independent Directors
The Independent Directors, having considered carefully the terms of the Offer, the PCCS
Offer and the Options Proposal and the advice given by MKES to the Independent Directors
in the IFA Letter, have set out their recommendation on the Offer, the PCCS Offer, and the
Options Proposal respectively, below:
(a)
Offer
The Independent Directors concur with MKES’ assessment of the Offer and its
Letter. Accordingly, the Independent Directors recommend that Shareholders
ACCEPT the Offer.
(b)
PCCS Offer
The Independent Directors concur with MKES’ assessment of the PCCS Offer and its
Letter. Accordingly, the Independent Directors recommend that PCCS Holders
ACCEPT the PCCS Offer.
39
(c)
Options Proposal
The Independent Directors concur with MKES’ assessment of the Options Proposal
and its recommendation thereon, as set out in Section 11.3 of this Circular and in the
IFA Letter. Accordingly, the Independent Directors recommend that
Optionholders ACCEPT the Options Proposal.
In making the above recommendation, the Independent Directors have not had regard to
the general or specific investment objectives, financial situations, risk profiles, tax positions
and/or particular needs and constraints of any specific Shareholder, PCCS Holder or
Optionholder. As different Shareholders, PCCS Holders and Optionholders would have
different investment profiles and objectives, the Independent Directors recommend that any
specific Shareholder, PCCS Holder and Optionholder who may require specific advice in
relation to his Shares, PCCS and/or Options should consult his stockbroker, bank manager,
solicitor, accountant or other professional advisers.
Shareholders, PCCS Holders and Optionholders should read and consider carefully
the recommendation of the Independent Directors and the advice of MKES to the
Independent Directors in respect of the Offer, the PCCS Offer and the Options
Proposal in their entirety before deciding whether to accept or reject the Offer, the
PCCS Offer and/or the Options Proposal (as the case may be). Shareholders, PCCS
Holders and Optionholders are also urged to read the Offer Document carefully.
12.
OVERSEAS PERSONS
Overseas Persons should refer to Section 16 of the Offer Document which is reproduced in
italics below:
“16.1 Overseas Persons. This Offer Document, the relevant Acceptance Forms, the
Option to Subscribe and/or any related documents do not constitute an offer,
invitation or solicitation to sell, subscribe for or buy any security or a solicitation of
any vote or approval in any jurisdiction where such offer, invitation or solicitation is
unlawful or unauthorised, and there shall not be any sale, issuance or transfer of the
securities referred to in this Offer Document, the relevant Acceptance Forms, the
Option to Subscribe and/or any related documents in any jurisdiction in contravention
of applicable law.
For the avoidance of doubt, the Offer and the PCCS Offer are open to all
Shareholders and PCCS Holders respectively, including those to whom this
Offer Document, the relevant Acceptance Forms, the Option to Subscribe
and/or any related documents may not be sent.
The availability of the Offer and the PCCS Offer (including the Option to Subscribe)
to Overseas Persons may be affected by the laws of the relevant overseas
jurisdictions. Accordingly, Overseas Persons should inform themselves about, and
observe, any applicable legal requirements in their own jurisdictions.
16.2 Copies of Documents. Where there are potential restrictions on sending this Offer
Document, the relevant Acceptance Forms, the Option to Subscribe and/or any
related documents to any overseas jurisdictions, the Offeror and DBS each reserves
the right not to send this Offer Document, the relevant Acceptance Forms, the Option
to Subscribe and/or any related documents to such overseas jurisdictions. Any
affected Overseas Person may nonetheless obtain copies of this Offer Document,
the relevant Acceptance Forms and/or any related documents during normal
business hours from (i) the office of the Registrar (if he is holding Shares which are
40
not deposited with CDP (“in scrip form”)) at 50 Raffles Place, #32-01 Singapore
Land Tower, Singapore 048623; or (ii) CDP (if he is a Depositor) at 9 North Buona
Vista Drive, #01-19/20 The Metropolis, Singapore 138588. Alternatively, an affected
Overseas Person may write to the Registrar (if he is holding Shares in scrip form) or
CDP (if he is a Depositor) to request this Offer Document, the relevant Acceptance
Forms and/or any related documents to be sent to an address in Singapore by
ordinary post at his own risk, up to five Market Days prior to the Closing Date.
16.3 Overseas Jurisdiction. It is the responsibility of any Overseas Person who wishes
to accept the Offer or the PCCS Offer (as the case may be) or exercise the Option
to Subscribe to satisfy himself as to the full observance of the laws of the relevant
jurisdiction in that connection, including the obtaining of any governmental approvals
or any other consents which may be required, or compliance with other necessary
formalities or legal requirements. Such Overseas Person shall be liable for any taxes,
imposts, duties or other requisite payments payable in such jurisdictions and the
Offeror and/or any person acting on its behalf (including the Financial Adviser) shall
be fully indemnified and held harmless by such Overseas Persons for any such
taxes, imposts, duties or other requisite payments as the Offeror and/or any person
acting on its behalf (including the Financial Adviser) may be required to pay. In (i)
requesting for this Offer Document, the relevant Acceptance Forms and/or any
related documents, (ii) accepting the Offer or the PCCS Offer (as the case may be)
and/or (iii) exercising the Option to Subscribe, the Overseas Person represents and
warrants to the Offeror and the Financial Adviser that he is in full observance of the
laws of the relevant jurisdiction in that connection, that he has obtained all
governmental approvals or any other consents which may be required and that he is
in full compliance with all necessary formalities or legal requirements. If any
Shareholder or PCCS Holder is in any doubt about his position, he should consult his
professional adviser in the relevant jurisdiction.
16.4 Notice. The Offeror and the Financial Adviser each reserves the right to notify any
matter, including the fact that the Offer and the PCCS Offer have been made, to any
or all of the Shareholders and the PCCS Holders (including Overseas Persons) by
announcement to the SGX-ST or paid advertisement in a daily newspaper published
and circulated in Singapore, in which case, such notice shall be deemed to have
been sufficiently given notwithstanding any failure by any Shareholder or PCCS
Holder (including an Overseas Person) to receive or see such announcement or
advertisement.”
13.
INFORMATION PERTAINING TO CPFIS INVESTORS AND SRS INVESTORS
As stated in Section 17.2 of the Offer Document, CPFIS Investors and SRS Investors
should receive further information on how to accept the Offer (and if applicable, the PCCS
Offer), and how to exercise the Option to Subscribe, from their respective CPF Agent Banks
and SRS Agent Banks. CPFIS Investors and SRS Investors are advised to consult their
respective CPF Agent Banks and SRS Agent Banks should they require further information,
and if they are in any doubt as to the action they should take, CPFIS Investors and SRS
Investors should seek independent professional advice. CPFIS Investors and SRS
Investors who wish to accept the Offer (and if applicable, the PCCS Offer) are to reply to
their respective CPF Agent Banks and SRS Agent Banks by the deadline stated in the letter
from their respective CPF Agent Banks and SRS Agent Banks, which may be earlier than
the Closing Date.
41
CPFIS Investors and SRS Investors will receive the Offer Price (and if applicable, the PCCS
Offer Price) payable in respect of the Offer Shares (and if applicable, the PCCS) validly
tendered in acceptance of the Offer (and if applicable, the PCCS Offer) through appropriate
intermediaries in their respective CPF investment accounts and SRS investment accounts.
14.
ACTION TO BE TAKEN BY SHAREHOLDERS AND PCCS HOLDERS
Shareholders and PCCS Holders who wish to accept the Offer and/or the PCCS Offer (as
the case may be) must do so not later than 5.30 p.m. (Singapore time) on 28 December
2015 (Monday) or such later date(s) as may be announced from time to time by or on behalf
of the Offeror. Please refer to Section 6.3 above for the procedure for acceptances.
Shareholders and PCCS Holders who do not wish to accept the Offer and/or PCCS Offer
need not take further action in respect of the Offer Document which has been sent to them.
15.
DIRECTORS’ RESPONSIBILITY STATEMENT
The recommendation of the Independent Directors to Shareholders, PCCS Holders and
Optionholders set out in Section 11.4 of this Circular is the sole responsibility of the
Independent Directors. Save for the foregoing, the Directors (including any Director who
may have delegated detailed supervision of this Circular) have taken all reasonable care to
ensure that the facts stated and opinions expressed in this Circular (other than those
relating to the Offeror, parties acting in concert or deemed to be acting in concert with the
Offeror, the Offer, the PCCS Offer, the Options Proposal and the IFA Letter) are fair and
accurate and that there are no other material facts not contained in this Circular, the
omission of which would make any statement in this Circular misleading.
In respect of the IFA Letter, the sole responsibility of the Directors has been to ensure that
the facts stated therein with respect to the Company are, to the best of their knowledge and
belief, fair and accurate in all material respects.
Where any information in this Circular has been extracted or reproduced from published or
otherwise publicly available sources (including, without limitation, the Offer Announcement,
the Offer Document and the IFA Letter) or obtained from the Offeror, the sole responsibility
of the Directors has been to ensure through reasonable enquiries that such information is
accurately extracted from such sources, or as the case may be, accurately reflected or
reproduced in this Circular.
The Directors jointly and severally accept full responsibility accordingly.
Yours faithfully
For and on behalf of the Board
Mr Hsieh Fu Hua
Chairman and Independent Director
42
APPENDIX I
LETTER FROM MKES TO THE INDEPENDENT DIRECTORS
9 December 2015
To:
The Independent Directors (As defined below)
Tiger Airways Holdings Limited
17 Changi Business Park Central 1
#04-06/09 Honeywell Building
Singapore 486073
Dear Sir/Madam,
VOLUNTARY CONDITIONAL GENERAL OFFER BY DBS BANK LTD., FOR AND ON BEHALF
OF SINGAPORE AIRLINES LIMITED.
1
INTRODUCTION
On 6 November 2015 (the “Offer Announcement Date”), DBS Bank Ltd. (“DBS” or
“Financial Adviser”) announced, for and on behalf of Singapore Airlines Limited (“SIA” or
the “Offeror”), that the Offeror intends to make a voluntary conditional general offer (the
“Offer”) for all the issued ordinary shares (the “Shares”) in the capital of Tiger Airways
Holdings Limited (“Tiger Airways” or the “Company”) and the perpetual convertible capital
securities issued by Tiger Airways (the “PCCS”), other than those already owned or agreed
to be acquired by the Offeror as at the date of the Offer.
As announced by the Company in an announcement dated 12 November 2015, Maybank
Kim Eng Securities Pte. Ltd. (“MKES”) has been appointed by the Company as the
independent financial adviser (“IFA”) to advise the directors of the Company who are
considered to be independent (the “Independent Directors”) for the purposes of the Offer
and the PCCS Offer. This letter, which sets out, inter alia, our views and evaluation of the
financial terms of the Offer and the PCCS Offer and our advice thereon to the Independent
Directors, will form part of the circular dated 9 December 2015 (the “Circular”) in respect
of the Offer.
On 20 November 2015, the Company announced that the Offeror had on 19 November 2015
obtained approval-in-principle from the SGX-ST for the dealing in, listing of and quotation
of up to 12,495,477 ordinary shares in the capital of the Offeror (the “New Offeror Shares”)
on the Official List of the SGX-ST(the “AIP”).
On 26 November 2015 (the “Commencement Date”), DBS, for and on behalf of the Offeror,
announced that the offer document dated 26 November 2015 (the “Offer Document”) had
been despatched to the Shareholders and the PCCS Holders. Correspondingly, the
proposal letter dated 26 November 2015 (the “Options Proposal Letter”) and the Options
Proposal Acceptance Letter had also been despatched to all holders of Options (the
“Optionholders”).
Unless the context requires otherwise, all capitalised terms used and not defined herein
shall have the same meanings given to them in the Circular and the Offer Document.
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Shareholders who validly accept the Offer (the “Accepting Shareholders”) will be (i) paid
a cash consideration of S$0.41 per Share (the “Offer Price”); and (ii) granted a
non-transferable option to subscribe (the “Shares Option to Subscribe” or “Shares OTS”)
for Offeror Shares in accordance with the terms and subject to the conditions set out in the
Offer Document.
Pursuant to Rule 19 of the Singapore Code on Take-overs and Mergers (the “Code”), DBS,
for and on behalf of the Offeror, also made an offer to the PCCS Holders to acquire the
PCCS, other than those already owned or agreed to be acquired by the Offeror as at the
Commencement Date (the “PCCS Offer”).
PCCS Holders who validly accept the PCCS Offer (the “Accepting PCCS Holders”) will be
(i) paid the “see-through” price (the “PCCS Offer Price”) for the PCCS validly tendered in
acceptance of the PCCS Offer; and (ii) granted a non-transferable option to subscribe (the
“PCCS Option to Subscribe” or “PCCS OTS”) for Offeror Shares, in accordance with the
terms and subject to the conditions set out in the Offer Document.
In connection with the Offer and the PCCS Offer, DBS, for and on behalf of the Offeror,
made an Options Proposal to all Optionholders where the Offeror will pay accepting
Optionholders a cash amount (the “Option Price”) calculated on a “see-through” basis on
the basis of the Offer Price, in accordance with the terms and subject to the conditions set
out in the Offer Document.
The Offeror will not be making an offer to acquire, or an appropriate proposal in respect of,
the Awards granted under the Tiger Airways RSP and the Tiger Airways PSP. For the
avoidance of doubt, the Offer will be extended to all new Shares unconditionally issued or
delivered or to be issued or delivered pursuant to the vesting of any Awards prior to the final
Closing Date.
2
TERMS OF REFERENCE
We do not, by this letter, comment on or warrant the merits of the Offer, the PCCS Offer and
the Options Proposal other than to form an opinion, for the purposes of compliance with the
Code, as to whether the financial terms of the Offer, the PCCS Offer and the Options
Proposal are fair and reasonable.
We have confined our evaluation to the financial terms of the Offer, the PCCS Offer and the
Options Proposal. In arriving at our opinion, we have taken cognizance of factors which we
believe are of general importance to an evaluation, from a financial point of view, of the
Offer, the PCCS Offer and the Options Proposal. This Letter outlines and summarises some
of the matters, bases, factors or assumptions which we have used in our assessment.
However, they are by no means exhaustive or a reproduction of all the matters, bases,
factors or assumptions which we have used in our assessment. Our terms of reference do
not require us to evaluate or comment on the rationale for, strategic or commercial merits
and/or risks of the Offer, the PCCS Offer and the Options Proposal or on the future
prospects of the Company (or any of its related or associated companies). Our terms of
reference also do not require us to comment on the financial merits and/or risks of the Offer,
the PCCS Offer and the Options Proposal where the assessment of such financial merits
and/or risks involves our review of non-publicly available information of the companies
involved to which we have no access and with which we have not been furnished. We have
also not conducted a comprehensive review of the business, operations and financial
condition of the Group. Such evaluation or comment, if any, remains the sole responsibility
of the Directors and the management although we may draw upon their views or make such
comments in respect thereof (to the extent deemed necessary or appropriate by us and
provided that such has been disclosed to us) in arriving at our view as set out in this letter.
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We were not requested or authorised to solicit, and we have not solicited, any indications
of interest from any third party with respect to the Shares, PCCS, Options or the assets of
the Company. We are therefore not addressing the relative merits of the Offer, the PCCS
Offer and the Options Proposal as compared to any alternative transaction (if any)
previously considered by the Company (or the Shareholders, PCCS Holders or
Optionholders) or that otherwise may be available to the Company (or the Shareholders,
PCCS Holders or Optionholders), or as compared to any alternative offer that might
otherwise be available in the future.
The Directors have confirmed to us that all relevant information duly required for our
performance of services as an IFA hereunder has been provided to us, that such information
provided and representations made to us are true, complete and accurate as at the Latest
Practicable Date, and that there are no omissions of which would cause any information
disclosed to us to be inaccurate, incomplete or misleading. We have further assumed that
all statements of fact, belief, opinion and intention made by the Directors in relation to the
Offer, the PCCS Offer and the Options Proposal have been reasonably made after due and
careful enquiry.
We have relied upon the assurances of the Directors that the Circular has been approved
by the Directors (including those who may have delegated detailed supervision of the
Circular). We have also relied upon such confirmation by the Directors and the assurances
of the Directors made pursuant to the Directors’ responsibility statement set out in
paragraph 15 of the Circular, that the Directors (including those who may have delegated
detailed supervision of the Circular) have taken all reasonable care to ensure that the facts
stated and all opinions expressed in the Circular (excluding those expressed in this letter)
and those expressed by or in relation to the Offeror, the Company and DBS are fair and
accurate and that no material facts have been omitted which might cause the Circular to be
misleading in any material respect. The Directors jointly and severally accept responsibility
accordingly. Where any information provided to us has been extracted from published or
otherwise publicly available sources, the responsibility of the Directors has been to ensure
that having made reasonable inquiries, such information was accurately extracted from
these sources, or as the case may be, reflected or reproduced in the Circular.
We have assumed and relied upon, without independent verification, the accuracy and
completeness of the information that was publicly available or supplied or otherwise made
available to us by the Company, which form a substantial basis for this opinion. We have
not independently verified such information, whether written or verbal, and accordingly
cannot and do not represent or warrant, expressly or impliedly, and do not accept any
responsibility for, the accuracy, completeness or adequacy of such information.
We have not made any independent evaluation or appraisal of the assets and liabilities of
the Company and we have not been furnished with any such independent evaluation or
appraisal. For the purpose of our evaluation of the Offer, the PCCS Offer and the Options
Proposal, from a financial point of view, we have not relied on any financial projections or
forecasts in respect of the Company, its subsidiaries or associated companies. We are not
required to express, and we do not express, any view on the growth prospects, earnings
potential or valuation of the Company. We also do not express any view herein as to the
prices at which the Shares and the PCCS may trade assuming the absence of the Offer and
the PCCS Offer or if the Offer and the PCCS Offer is not effected.
In addition, we have assumed that the Offer, the PCCS Offer and the Options Proposal will
be consummated in accordance with the terms set forth in the Offer Document without any
waiver, amendment or delay in the fulfilment of any terms or conditions or the imposition of
any terms or conditions. We have assumed that all governmental, regulatory or other
approvals and consents required for the Offer, the PCCS Offer and the Options Proposal
I-3
will be obtained and that no delays, limitations, conditions or restrictions will be imposed
that would have a material adverse effect on the contemplated benefits expected to be
derived from the Offer, the PCCS Offer and the Options Proposal.
We will receive a fee from the Company for the delivery of this letter. In addition, the
Company has agreed to indemnify us for certain liabilities arising out of our engagement.
In the ordinary course of our trading, brokerage, asset management and financing
activities, we and our affiliates have actively traded, and may continue to actively trade, the
debt or equity securities or senior loans of the Company or the Offeror (and parties acting
in concert with them) or any other company that may be involved in the Offer, the PCCS
Offer and the Options Proposal, for our own account or for the accounts of customers and,
accordingly, we may at any time hold long or short positions in such securities. We and our
affiliates may also seek to provide services to the Company, the Offeror (and parties acting
in concert with each of the Company and the Offeror) in the future and expect to receive
fees for rendering such services.
The preparation of this letter, our financial evaluation of the Offer, the PCCS Offer and the
Options Proposal and our opinion in this letter are based upon market, economic, industry,
monetary and other conditions prevailing as at the Latest Practicable Date, as well as
publicly available information and information provided to us by the as at the Latest
Practicable Date. Such conditions may change significantly over a relatively short period of
time. Shareholders, PCCS Holders and Optionholders should further take note of any
announcements relevant to their consideration of the Offer, PCCS Offer and Options
Proposal which may be released by the Company and/or the Offeror after the Latest
Practicable Date. In arriving at our view, we have taken into account certain other factors
and have been required to make certain assumptions. We assume no responsibility to
update, revise or reaffirm our opinion in light of any subsequent development after the
Latest Practicable Date that may affect our opinion contained herein.
As stated in paragraph 8.1 of the Offer Document, the Accepting Shareholders and the
Accepting PCCS Holders will have the flexibility to decide how they wish to utilise their cash
consideration, whether to acquire the Offeror Shares through the exercise of the respective
Shares Option to Subscribe and PCCS Option to Subscribe (each an “Option to
Subscribe”) or through the open market or not at all.
In particular, the decision to exercise the Option to Subscribe represents an investment
decision for the Accepting Shareholders and Accepting PCCS Holders, which is separate
from the decision on whether to accept the Offer or the PCCS Offer, and is subject to
various factors, including but not limited to investment objectives of each Shareholder and
PCCS Holder, respectively. We further highlight that the realizable value from the Option to
Subscribe depends on several factors, such as future prospects and share price of the
Offeror Shares. We have not been furnished or given access to any non-publicly available
information of the Offeror and we have not conducted any analysis on the share price of the
Offeror Shares.
In rendering our advice and giving our opinion, we did not have regard to the general or
specific investment objectives, financial situation, risk profiles, tax position or particular
needs and constraints of any individual Shareholder, PCCS Holder or Optionholder. As
each Shareholder, PCCS Holder and Optionholder would have different investment
objectives and profiles, we would advise the Independent Directors to recommend that any
individual Shareholder, PCCS Holder and Optionholder who may require specific advice in
relation to his or her investment objectives or portfolio should consult his or her stockbroker,
bank manager, solicitor, accountant or other professional advisers immediately.
I-4
We are not legal, tax or regulatory advisers. We are financial advisers only and have relied
upon, without independent verification, the assessment of the Company by its advisers with
respect to legal, tax or regulatory requirements.
Whilst this letter may be reproduced in the Circular, neither the Company nor the Directors
may reproduce, disseminate or quote this letter (or any part hereof) for any purpose other
than in relation to the Offer, the PCCS Offer and the Options Proposal at any time and in
any manner without the prior written consent of MKES in each specific case. We have had
no role or involvement and have not provided any advice, financial or otherwise,
whatsoever in the preparation, review and verification of the Circular (other than this letter).
Accordingly, we take no responsibility for and express no views, express or implied, on the
contents of the Circular (other than this letter). This letter is addressed to the Independent
Directors solely for their benefit in connection with and for the purposes of their
consideration of the Offer, the PCCS Offer and the Options Proposal, and the
recommendations made by them to the Shareholders, PCCS Holders and Optionholders
with regard to the respective Offer, PCCS Offer and Options Proposal shall remain the
responsibility of the Independent Directors. Our opinion should not, in any event, be relied
on as a recommendation to, or confer any rights or remedies upon, any third party, including
without limitation, Shareholders, PCCS Holders, Optionholders, employees or creditors of
the Company. This letter does not constitute a recommendation to any Shareholder, PCCS
Holder and Optionholder as to whether they should accept or reject the Offer, the PCCS
Offer and the Options Proposal, respectively, or any matters related thereto. Our advice in
relation to the Offer, the PCCS Offer and the Options Proposal should be considered in the
context of the entirety of this letter and the Circular.
3
THE OFFER
The principal terms and conditions of the Offer are set out in paragraph 2 of the Offer
Document. Shareholders are advised to read the terms and conditions of the Offer set out
in the Offer Document carefully.
3.1
Offer Terms
As stated in paragraph 2 of the Offer Document, DBS has, for and on behalf of the Offeror,
made the Offer to acquire all the Offer Shares other than those Shares already owned or
agreed to be acquired by SIA as at the Commencement Date, in accordance with Section
139 of the SFA and the Code on the following basis:
(a)
Accepting Shareholders will be:
(i)
paid S$0.41 in cash for each Offer Share validly tendered in acceptance of the
Offer; and
(ii)
granted a non-transferable Shares Option to Subscribe for Offeror Shares on the
following principal terms and conditions:
a.
the Shares Option to Subscribe will only be granted to the Accepting
Shareholder if the Offer becomes or is declared to be unconditional in all
respects in accordance with its terms;
b.
the Shares Option to Subscribe will be exercisable by the Accepting
Shareholder at any time during a 15 Market Day period (the “OTS Exercise
Period”), which will commence on a date to be announced by the Offeror
after the Final Settlement Date. The Offeror Shares will only be issued to the
Accepting Shareholder if the Accepting Shareholder has validly exercised
I-5
the Shares Option to Subscribe during the OTS Exercise Period. For the
avoidance of doubt, if the Shares Option to Subscribe is not validly
exercised by the Accepting Shareholder during the OTS Exercise Period,
the Shares Option to Subscribe will lapse and be null and void;
c.
the subscription price of the Offeror Shares payable by the Accepting
Shareholder exercising the Shares Option to Subscribe will be S$11.1043
(the “Subscription Price”) for each Offeror Share; and
d.
the maximum number of Offeror Shares which the Accepting Shareholder
may subscribe for pursuant to the Shares Option to Subscribe will be
Where:
“A” =
Total Offer Price paid or payable to the Accepting Shareholder
pursuant to the terms of the Offer in respect of all the Offer Shares
validly tendered by such Accepting Shareholder in acceptance of
the Offer
“B” =
The indicative terms and conditions of the Shares Option to Subscribe are set out
in Appendix 4 to the Offer Document. Details relating to the Offeror Shares to be
issued and/or transferred pursuant to the valid exercise of the Shares Option to
Subscribe by Accepting Shareholders are set out in paragraph 8.3 of the Offer
Document.
(b)
The Offer Shares will include:
(i)
all issued Shares, other than those already owned or agreed to be acquired by
the Offeror as at the Commencement Date, but including issued Shares owned,
controlled or agreed to be acquired by parties acting or deemed to be acting in
concert with the Offeror in connection with the Offer;
(ii)
all new Shares unconditionally issued or to be issued pursuant to the valid
conversion of any of the PCCS prior to the final Closing Date;
(iii) all new Shares unconditionally issued or to be issued pursuant to the valid
exercise of any Options granted under the Tiger Airways Scheme prior to the final
Closing Date; and
(iv) all new Shares unconditionally issued or delivered, or to be issued or delivered,
pursuant to the vesting of any Awards granted under the Tiger Airways RSP and
the Tiger Airways PSP prior to the final Closing Date.
I-6
(c)
The Offer Shares will be acquired:
(i)
fully paid;
(ii)
free from any Encumbrances; and
(iii) together with all rights, benefits and entitlements attached thereto as at the Offer
Announcement Date and thereafter attaching thereto, including but not limited to
the right to receive and retain all Distributions declared, paid or made by the
Company in respect of the Offer Shares on or after the Offer Announcement Date.
(d)
3.2
Adjustment for Distributions
(i)
Without prejudice to the foregoing, the Offer Price has been determined on the
basis that the Offer Shares will be acquired with the right to receive any
Distribution that may be declared, paid or made by the Company on or after the
Offer Announcement Date.
(ii)
Accordingly, in the event that any Distribution is or has been declared, paid or
made by the Company in respect of the Offer Shares on or after the Offer
Announcement Date to the Accepting Shareholder, the Offer Price payable to
such Accepting Shareholder shall be reduced by an amount which is equal to the
amount of such Distribution, depending on when the settlement date in respect
of the Offer Shares tendered in acceptance of the Offer by the Accepting
Shareholder falls, as set out in paragraph 2.5 of the Offer Document.
Conditions of the Offer
(a)
As stated in paragraph 2.6 of the Offer Document, the Offer is subject to the following
conditions:
(i)
The Offeror having received, by the close of the Offer, valid acceptances (which
have not been withdrawn) in respect of such number of Offer Shares which, when
taken together with the Shares owned, controlled or agreed to be acquired by the
Offeror and parties acting in concert with it before or during the Offer, will result
in the Offeror and parties acting in concert with it holding such number of Shares
carrying more than 90 per cent. of the voting rights attributable to all the Shares
in issue as at the close of the Offer (including any voting rights attributable to
Shares (i) unconditionally issued or to be issued pursuant to the valid conversion
and/or exercise of any PCCS and/or Options prior to the final Closing Date or (ii)
unconditionally issued or delivered, or to be issued or delivered, pursuant to the
vesting of any Awards prior to the final Closing Date) (the “Acceptance
Condition”).
Accordingly, the Offer will not become or be capable of being declared
unconditional as to acceptances until the close of the Offer, unless at any time
prior to the close of the Offer, the Offeror has received valid acceptances (which
have not been withdrawn) in respect of such number of Offer Shares which, when
taken together with the Shares owned, controlled or agreed to be acquired by the
Offeror and parties acting in concert with it before or during the Offer, will result
in the Offeror and parties acting in concert with it holding such number of Shares
carrying more than 90 per cent. of the maximum potential issued share capital of
the Company. For this purpose, the “maximum potential issued share capital
I-7
of the Company” means the total number of Shares which would be in issue had
all Shares (a) under the PCCS and the Options been issued and (b) under the
Awards been issued and/or delivered, as at the date of such declaration.
(ii)
The AIP of the SGX-ST for the dealing in, listing of and quotation of the new
Offeror Shares to be issued in connection with the Offer and the PCCS Offer on
the Official List of the SGX-ST.
On 19 November 2015, the Offeror received the AIP from the SGX-ST.
Accordingly, as at the Latest Practicable Date, the condition to the Offer relating
to the AIP has been fulfilled and the Acceptance Condition remains the only
condition to the Offer.
We note that the Offeror has reserved the right to waive the Acceptance Condition or
reduce such condition to a level equal to or less than 90 per cent. of the voting rights
attributable to all the Shares in issue as at the close of the Offer, subject to the
approval of the SIC. In the event that such revision is made during the course of the
Offer, the revised Offer will remain open for at least another 14 days and Shareholders
who have accepted the initial Offer will be allowed to withdraw their acceptances within
eight days of the notification of such revision.
The Offer is not subject to any other condition. In particular, the Offeror is not required
to seek the approval of its shareholders for the Offer, as noted in the announcement
dated 6 November 2015 released by the Offeror on the SGX-ST in relation to the Offer.
4
THE PCCS OFFER
The principal terms and conditions of the PCCS Offer are set out in paragraph 3 of the Offer
Document. PCCS Holders are advised to read the terms and conditions of the PCCS Offer
set out in the Offer Document carefully.
4.1
PCCS Offer Terms
As stated in paragraph 3 of the Offer Document, DBS, for and on behalf of the Offeror, made
the PCCS Offer to the PCCS Holders to acquire the PCCS, other than those already owned
or agreed to be acquired by the Offeror as at the Commencement Date.
(a)
Each Accepting PCCS Holder will be:
(i)
paid the PCCS Offer Price for the PCCS validly tendered in acceptance of the
PCCS Offer in accordance with Note 1(a) on Rule 19 of the Code. In other words,
the PCCS Offer Price will be an amount in cash equal to the Offer Price multiplied
by the number of Offer Shares (rounded down to the nearest Offer Share) which
would have been issued had the PCCS been converted (based on the aggregate
principal amount of the PCCS tendered in acceptance of the PCCS Offer); and
(ii)
granted a non-transferable PCCS Option to Subscribe for Offeror Shares on the
following principal terms and conditions:
a.
the PCCS Option to Subscribe will only be granted to the Accepting PCCS
Holder if the Offer becomes or is declared to be unconditional in all respects
in accordance with its terms;
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b.
the PCCS Option to Subscribe will be exercisable by the Accepting PCCS
Holder at any time during the OTS Exercise Period. The Offeror Shares will
only be issued to the Accepting PCCS Holder if the Accepting PCCS Holder
has validly exercised the PCCS Option to Subscribe during the OTS
Exercise Period. For the avoidance of doubt, if the PCCS Option to
Subscribe is not validly exercised by the Accepting PCCS Holder during the
OTS Exercise Period, the PCCS Option to Subscribe will lapse and be null
and void;
c.
the subscription price of the Offeror Shares payable by the Accepting PCCS
Holder exercising the PCCS Option to Subscribe will be the Subscription
Price for each Offeror Share; and
d.
the maximum number of Offeror Shares which the Accepting PCCS Holder
may subscribe for pursuant to the PCCS Option to Subscribe will be
Where:
“A” =
Total PCCS Offer Price paid or payable to the Accepting PCCS
Holder pursuant to the terms of the PCCS Offer in respect of all the
PCCS validly tendered by such Accepting PCCS Holder in
acceptance of the PCCS Offer
“B” =
The indicative terms and conditions of the PCCS Option to Subscribe are set out
in Appendix 4 to the Offer Document. Details relating to the Offeror Shares to be
issued and/or transferred pursuant to the valid exercise of the PCCS Option to
Subscribe by Accepting PCCS Holders are set out in paragraph 8.3 of the Offer
Document.
(b)
4.2
The PCCS will be acquired:
(i)
free from all Encumbrances; and
(ii)
together with all rights, benefits and entitlements attached thereto as at the date
of transfer of the PCCS from the Accepting PCCS Holder to the Offeror (the
“PCCS Transfer Date”) and thereafter attaching thereto, including but not limited
to the right to receive and retain all Distributions declared, paid or made by the
Company in respect of the PCCS on or after the PCCS Transfer Date.
Conditions of the PCCS Offer
The PCCS Offer will be subject to and conditional upon the Offer becoming or being
declared unconditional in all respects in accordance with its terms.
I-9
4.3
Offer and PCCS Offer Mutually Exclusive
For the avoidance of doubt, whilst the PCCS Offer is conditional upon the Offer becoming
or being declared unconditional in all respects in accordance with its terms, the Offer will
not be conditional upon acceptances received in relation to the PCCS Offer. The Offer and
the PCCS Offer are separate and are mutually exclusive. The PCCS Offer does not form
part of the Offer, and vice versa.
Without prejudice to the foregoing, if a PCCS Holder converts his PCCS in order to accept
the Offer in respect of the new Shares issued pursuant to such conversion, he may not
accept the PCCS Offer in respect of such converted PCCS. Conversely, if a PCCS Holder
wishes to accept the PCCS Offer in respect of his PCCS, he should not convert those PCCS
and accept the Offer in respect of the new Shares to be issued pursuant to such conversion.
5
OPTIONS PROPOSAL
As stated in paragraph 4 of the Offer Document, there are 10,865 Options to subscribe for
an aggregate of 10,865 Shares granted under the Tiger Airways Scheme as at the Latest
Practicable Date. Under the rules of the Tiger Airways Scheme, the Options are not
transferable by the holders thereof 8. In view of this restriction, the Offeror will not make an
offer to acquire the Options, although, for the avoidance of doubt, the Offer will be extended
to all new Shares unconditionally issued or to be issued pursuant to the valid exercise of
any Options prior to the final Closing Date. Optionholders are advised to read the terms and
conditions of the Options Proposal set out in the Offer Document carefully.
5.1
Options Proposal Terms
As stated in paragraph 4 of the Offer Document, DBS for and on behalf of the Offeror, will
make the Options Proposal to all Optionholders, subject to:
(a)
the Offer becoming or being declared to be unconditional in all respects in accordance
with its terms; and
(b)
the relevant Options continuing to be exercisable into new Shares.
Each Optionholder who validly accepts the Options Proposal will be paid a cash amount in
5.2
(a)
(b)
not to exercise all or any of his rights as holder of the Relevant Options.
Options Price
The Options Price is calculated on a “see-through” basis on the basis of the Offer Price. In
other words, the Options Price for an Option will be the amount by which the Offer Price
exceeds the subscription price of that Option. If, however, the subscription price of an
Option is equal to or more than the Offer Price, the Options Price for such Option will be the
nominal amount of S$0.001.
For the avoidance of doubt, an Optionholder who validly accepts the Options Proposal will
not receive any Option to Subscribe in respect of the Offeror Shares.
8
Except in certain limited circumstances including by will or laws of descent and distribution.
I-10
5.3
Offer and Options Proposal are Mutually Exclusive
For the avoidance of doubt, whilst the Options Proposal is conditional upon the Offer
becoming or being declared to be unconditional in all respects in accordance with its terms,
the Offer will not be conditional upon acceptances received in relation to the Options
Proposal. The Offer and the Options Proposal are separate and are mutually exclusive. The
Options Proposal does not form part of the Offer, and vice versa.
Without prejudice to the foregoing, if an Optionholder exercises his Options in order to
accept the Offer in respect of the new Shares issued pursuant to such exercise, he may not
accept the Options Proposal in respect of such exercised Options. Conversely, if an
Optionholder wishes to accept the Options Proposal in respect of his Options, he should not
exercise those Options and accept the Offer in respect of the new Shares to be issued
pursuant to such exercise.
6
NO AWARDS OFFER
As stated in paragraph 5 of the Offer Document, under the terms of the Tiger Airways RSP
and the Tiger Airways PSP, the Awards are not transferable by the holders thereof. In view
of this restriction, the Offeror will not be making an offer to acquire, or an appropriate
proposal in respect of, the Awards. For the avoidance of doubt, the Offer will be extended
to all new Shares unconditionally issued or delivered or to be issued or delivered pursuant
to the vesting of any Awards prior to the final Closing Date.
7
DESCRIPTION OF THE OFFEROR
Please refer to paragraph 9 of the Offer Document for the description of the Offeror.
8
OFFEROR’S RATIONALE AND INTENTIONS
Please refer to paragraph 11 of the Offer Document for the rationale for the Offer and
paragraph 12 of the Offer Document for the Offeror’s intentions for the Company. We would
recommend Independent Directors to advise Shareholders, PCCS Holders and
Optionholders to read those sections carefully.
9
ASSESSMENT OF THE FINANCIAL TERMS OF THE OFFER
9.1
General Bases and Assumptions
The figures and underlying financial data used in our analyses in this section of this letter
have been extracted from, amongst others, Bloomberg L.P., S&P Capital IQ, SGX-ST filings
and relevant public documents of the respective companies covered by such sources as at
the Latest Practicable Date. We have not independently verified (nor have we assumed
responsibility or liability for independently verifying) or ascertained and make no
representations or warranties, express or implied, on the accuracy, completeness or
adequacy of such information. We note that the accounting polices used by the comparable
companies or the targets of the comparable transactions may be different. The differences
between accounting principles used by the Company and the comparable companies or the
targets of the comparable transactions may therefore render comparisons between these
companies not meaningful or less useful than if the same accounting policy had been used
consistently. In addition, we wish to highlight that the comparable companies or the targets
of the comparable transactions may differ from the Company in terms of location, business
mix, scale, capital structure, profitability, geographical spread and track record. Any
conclusions drawn from comparisons made may therefore not necessarily reflect the
possible market valuation of the Company.
I-11
In the course of our analysis, we have assumed that the share capital of the Company
comprises 2,500,082,980 issued Shares, 13,350,091 PCCS which are convertible into
25,282,473 new Shares at the prevailing conversion price of S$0.565 per Share and 10,865
Options to subscribe for an aggregate of 10,865 new Shares as at the Latest Practicable
Date. We note that there are 18,994,795 outstanding Awards granted under the Tiger
Airways RSP and the Tiger Airways PSP, and the Offeror will not make any proposal to
acquire the Awards, as stated in paragraph 5 of the Offer Document. For the purpose of our
analysis, we have considered the fully diluted share capital comprising 2,525,376,318
Shares. These 2,525,376,318 Shares include Shares which would have been issued had all
Shares under the PCCS and the Options been issued, but exclude any Shares which may
be issued pursuant to the outstanding Awards.
9.2
Methodology
In assessing the fairness and reasonableness of the financial terms of the Offer from a
financial perspective as at the Latest Practicable Date, the main factors which we consider
to be pertinent and to have a significant bearing on our assessment are as follows:
(a)
share price analysis to assess how the Offer Price compares to the historical share
price of the Company over different observation periods;
(b)
liquidity analysis to assess whether the historical share price of the Company provides
a meaningful reference point for comparison against the Offer Price;
(c)
precedent take-over analysis to compare the premium/discount of the Offer Price over
the historical share price of the Company to selected take-over offer transactions in
Singapore;
(d)
trading comparable analysis to assess the valuation multiples implied by the Offer
Price in comparison with trading multiples of comparable companies;
(e)
precedent transaction analysis to assess the valuation multiples implied by the Offer
Price in comparison with multiples of comparable transactions; and
(f)
research broker estimates analysis to assess how the Offer Price compares to
research broker estimates for the Company.
The evaluation parameters are discussed in greater detail in the ensuing paragraphs.
9.3
Historical Share Price Trading Analysis
(a)
Historical Share Price Performance and Trading Volume for the one-year period prior
to and including 5 November 2015 (the “Last Trading Day” being the date immediately
prior to the Offer Announcement Date)(1)
I-12
We set out in the chart below, the closing price and daily trading volume of the Shares for
the one-year period prior to and including the Last Trading Day.
120.0
0.45
Offer Price: S$0.410
100.0
80.0
0.35
18
15
1
3
8
60.0
10
9
Vol (mm)
Share Price (S$)
0.40
12
14
0.30
11
16
2
4
5
6
40.0
17
13
7
0.25
20.0
0.20
Nov 14
Dec 14
Jan 15
Feb 15
Mar 15
Volume
Apr 15
May 15
Share Price
Jun 15
Jul 15
Event
Aug 15
Sep 15
Oct 15
0.0
Nov 15
Offer Price
Note:
(1)
Based on data extracted from Bloomberg L.P. which shows prices adjusted to reflect any changes in the
share capital of Tiger Airways due to rights issues.
Date
Synopsis
1
06-Nov-2014
The Company announced that it had on 5 November 2014 received the approval
in-principle from the SGX-ST for the dealing in, listing of and quotation of up to
1,169,842,389 new ordinary shares in the capital of the Company (the “2015
Rights Shares”), in connection with its proposed renounceable non-underwritten
rights issue (the “2015 Rights Issue”) at an issue price of S$0.20 for each rights
share on the basis of 85 rights shares for every 100 existing ordinary shares
2
27-Nov-2014
Resolution approved and passed for both the proposed sale of the Company’s
entire 40% shareholding interest in Tiger Airways Australia Pty Ltd (“Tiger
Australia”) and the proposed 2015 Rights Issue
3
28-Nov-2014
The Company announced that the Competition Commission of Singapore (the
“CCS”) issued its Grounds of Decision clearing the merger notification submitted
by the Offeror and the Company in relation to, among others, the acquisition by
the Offeror of additional Shares pursuant to the undertaking provided by the
Offeror in support of the 2015 Rights Issue and the Company
4
5-Dec-2014
SIA announced that it converted all 189,390,367 non-voting PCCS issued by
Tiger Airways held by it into 358,668,482 new Tiger Airways Shares at the
adjusted conversion price of S$0.565. The shareholding percentage interest of
SIA in Tiger Airways increased from approximately 40.0 per cent. to
approximately 56.0 per cent. of the total number of issued Tiger Airways Shares
as a result
5
22-Dec-2014
The Company announced that of the gross proceeds of S$297 million raised from
the 2013 Rights Issue and PCCS offering, a further S$7 million has been
disbursed, since the last utilisation of proceeds announcement on 16 October
2014, towards repayment of existing loans
6
05-Jan-2015
The Company announced that the 2015 Rights Shares are to be allotted and
issued on 7 January 2015 and listed and quoted on the Main Board of the
SGX-ST with effect from 9.00 a.m. on 8 January 2015
I-13
Date
Synopsis
7
14-Jan-2015
The Company announced since the CCS’s grant of anti-trust immunity (“ATI”) on
8 August 2014, Scoot and the Company have seen a doubling of passengers
connecting between the two airlines on account of more competitive airfares,
co-ordinated joint promotions and the launch of new itineraries only available by
combining the routes of both airlines
8
26-Jan-2015
The Company reported a profit after tax of S$2.2 million for the quarter ended 31
December 2014, a turnaround from a loss after tax of S$118.5 million recorded
in the corresponding quarter of prior year
9
06-Feb-2015
The Company completed the proposed sale of its entire 40% shareholding
interest in Tiger Australia under a share purchase agreement entered into
between the Company, Virgin Australia Holdings Limited and VAH Newco No. 1
Pty Ltd
10
05-May-2015
The Company reported an operating loss of S$2.3 million in the quarter ended 31
March 2015, compared to an operating loss of S$24.2 million recorded in the
previous corresponding quarter
11
17-Jun-2015
The Company announced that of the gross proceeds of S$229.4 million raised
from the 2015 Rights Issue, a total of S$31.3 million has been materially
disbursed for (1) progressive repayment of existing loans, (2) funding for aircraft,
spare engines and other aircraft parts, and associated pre-delivery payments,
and (3) 2015 Rights Issue expenses
12
22-Jul-2015
The Company reported an operating profit of S$0.6 million in the quarter ended
30 June 2016, compared to an operating loss of S$16.4 million recorded in the
previous corresponding quarter
13
21-Sep-2015
The Company’s and Cebu Pacific’s strategic alliance agreement was approved
by the CCS
14
02-Oct-2015
The Company announced that of the gross proceeds of S$229.4 million raised
from the 2015 Rights Issue, a total of S$25.5 million has been materially
disbursed for (1) progressive repayment of existing loans, and (2) funding for
aircraft, spare engines and other aircraft parts, and associated pre-delivery
payments
15
19-Oct-2015
The Company announced that Scoot and Tiger Airways will expand their
co-operation when Scoot launches daily services to Guangzhou, China on 16
January 2016. Scoot’s Boeing 787 Dreamliner service will replace one daily flight
currently operated by the Company, and the two airlines will together operate
twice daily services and manage the route jointly
16
23-Oct-2015
The Company reported a S$12.8 million net loss for the second quarter ended 30
September 2015 which was 93.0% lower than the S$182.4 million loss reported
a year ago
17
04-Nov-2015
The Company and Airbus entered into a Flight Hour Services – Tailored Support
Package agreement, under which Airbus will provide Fleet Technical
Management and Inventory Technical Management for Tiger Airways’ A320ceo
aircraft. The 10-year contract commences in early 2016. Expected cost savings
will be approximately US$20 million over the term of the contract
18
05-Nov-2015
Last Trading Day prior to the announcement of the Offer
Sources: Bloomberg L.P. and company filings
The closing prices of the Shares have been recorded in a band between S$0.245 and
S$0.365 per Share 9 over the one-year period prior to and including the Last Trading Day.
The Shares have not traded above the Offer Price during the one-year period prior to and
including the Last Trading Day.
9
Based on the closing price of the Shares extracted from Bloomberg L.P.
I-14
The Offer Price represents a premium of 12.3% over the highest closing price of S$0.365
per Share and 67.3% premium over the lowest closing price of S$0.245 per Share recorded
in the one-year period prior to and including the Last Trading Day.
(b)
Historical Share Price Performance and Trading Volume from the Offer Announcement
Date to the Latest Practicable Date (1)
We also set out in the chart below, the closing price and daily trading volume of the Shares
from the Offer Announcement Date prior to and including the Latest Practicable Date.
0.45
90.0
80.0
70.0
60.0
2
0.41
Offer Price: S$0.410
1
3
4
50.0
Vol (mm)
Share Price (S$)
0.43
40.0
0.39
30.0
20.0
0.37
10.0
0.35
0.0
Volume
Share Price
Event
Offer Price
Note:
(1)
share capital of Tiger Airways due to rights issues.
Date
Synopsis
1
06-Nov-2015
DBS announced, for and on behalf of the Offeror, that the Offeror intends to make
the Offer and the PCCS Offer
2
12-Nov-2015
MKES appointed by the Company to advise the Independent Directors for the
purposes of the Offer and the PCCS Offer
3
20-Nov-2015
The Company announced that the Offeror has on 19 November 2015 obtained
AIP from the SGX-ST for the dealing in, listing of and quotation of up to
12,495,477 New Offeror Shares on the Official List of the SGX-ST. The AIP was
granted subject to the compliance with the SGX-ST’s listing requirements; and
submission of a written undertaking from the Offeror that it will comply with Rule
804 of the Listing Manual of the SGX-ST
4
26-Nov-2015
DBS, for and on behalf of the Offeror, announced that the Offer Document had
been despatched to the Shareholders and the PCCS Holders, and the Options
Proposal Letter and the Options Proposal Acceptance Letter had also been
despatched to the Optionholders. The Company also announced an offeree
circular containing, inter alia, the advice of the IFA and the recommendation of
the Independent Directors will also be despatched to Shareholders and PCCS
Holders no later than 10 December 2015.
Sources: Bloomberg L.P. and company filings
I-15
The Company’s daily closing share prices have been recorded in a band between S$0.405
and S$0.415 per Share in the period between the Offer Announcement Date and the Latest
Practicable Date. Based on our review of the daily closing price, we note that the Shares
had only closed above the Offer Price at S$0.415 per Share on 12 November 2015. The
total volume transacted at S$0.415 per Share between the Offer Announcement Date and
the Latest Practicable Date is approximately 13.1 million Shares which amounts to
approximately 0.5% of the total number of issued Shares of the Company and
approximately 4.6% of the total number of Shares transacted during the said period. 10
(c)
VWAP Analysis
The Offer Price represents the following premia over the historical traded prices of the
Shares:
Benchmark
Price (S$)(1)(2)
Premium over
Benchmark
Price (%)(3)
Last traded price per Share as quoted on the SGX-ST on the
0.405
1.2
Last traded price per Share as quoted on the SGX-ST on the
Last Trading Day
0.310
32.3
VWAP of the Shares as transacted on the SGX-ST for the onemonth period up to and including the Last Trading Day
0.303
35.3
VWAP of the Shares as transacted on the SGX-ST for the
three-month period up to and including the Last Trading Day
0.288
42.4
VWAP of the Shares as transacted on the SGX-ST for the sixmonth period up to and including the Last Trading Day
0.300
36.7
VWAP of the Shares as transacted on the SGX-ST for the oneyear period up to and including the Last Trading Day
0.308
33.1
Description
Notes:
(1)
share capital of Tiger Airways due to rights issues
(2)
Computed based on the Share prices rounded to the nearest three decimal places
(3)
Figures rounded to the nearest 1 decimal place.
(i)
The Offer Price represents a premium of approximately 33.1%, 36.7%, 42.4% and
35.3% over the VWAP of the Shares for the one-year, six-month, three-month and
one-month periods prior to and including the Last Trading Day, respectively;
(ii)
The Offer Price represents a premium of approximately 32.3% over the last traded
price of the Shares on the SGX-ST on the Last Trading Day; and
(iii) The Offer Price represents a premium of approximately 1.2% over the last traded price
of the Shares on the SGX-ST on the Latest Practicable Date.
10
Based on data extracted from Bloomberg L.P.
I-16
We note that our analysis of the past price performance of the Shares is not indicative of
the future price performance levels of the Shares, which will be influenced by amongst other
factors, the performance and prospects of the Company, prevailing economic conditions,
economic outlook, stock market conditions and sentiments.
9.4
Liquidity Analysis
Ordinarily, share prices may be affected by different factors including relative liquidity, free
float and investor interest or market sentiment at any given point in time. In considering the
Offer Price relative to the Company’s historical share price, we have considered the relative
liquidity of the Company in comparison with companies that make up the top 15 companies
traded on the SGX-ST in Singapore based on market capitalisation and the SGX-ST
companies with market capitalisation of between S$900 million and S$1,100 million as at
the Latest Practicable Date, excluding the Company. This analysis is to check whether
historical trading prices provide a meaningful reference point for comparison against the
Offer Price.
(a)
Liquidity Analysis of the Top 15 SGX-ST Listed Companies by Market Capitalisation (1)
Market Cap
Free
(S$ billion) Float(2)
Company Name
12M ADTV/
Free float(3)
12M ADTV/
Market Cap(4)
Singapore Telecommunications Limited
Jardine Matheson Holdings Limited
Jardine Strategic Holdings Limited
DBS Group Holdings Ltd
Oversea-Chinese Banking Corporation Limited
United Overseas Bank Limited
Hongkong Land Holdings Limited
Wilmar International Limited
Thai Beverage Public Company Limited
CapitaLand Limited
Jardine Cycle & Carriage Limited
Keppel Corporation Limited
Singapore Airlines Limited
Dairy Farm International Holdings Limited
Great Eastern Holdings Limited
61.06
49.62
42.80
41.41
35.68
31.16
23.34
18.33
17.07
13.25
12.72
11.97
11.84
11.49
9.93
49.00%
38.85%
17.51%
70.73%
66.10%
76.00%
49.99%
28.33%
27.71%
53.18%
25.66%
66.00%
43.71%
16.21%
12.00%
0.29%
0.10%
0.10%
0.26%
0.20%
0.22%
0.21%
0.37%
0.18%
0.51%
0.27%
0.46%
0.27%
0.12%
0.06%
0.15%
0.04%
0.02%
0.21%
0.15%
0.19%
0.11%
0.11%
0.05%
0.29%
0.08%
0.37%
0.13%
0.02%
0.01%
Mean
Median
Maximum
Minimum
26.11
18.33
61.06
9.93
42.73%
43.71%
76.00%
12.00%
0.24%
0.22%
0.51%
0.06%
0.13%
0.11%
0.37%
0.01%
0.78
44.17%
0.62%
0.28%
1.01
44.17%
0.72%
0.26%
Tiger Airways Holdings Limited (one-year prior
to and including the Last Trading Day)(5)
Tiger Airways Holdings Limited (one-year prior
to and including the Latest Practicable
Date)(5)
Sources:
Bloomberg L.P. and companies’ filings
Notes:
(1)
All figures as at the Latest Practicable Date.
(2)
Free float percentages are based on latest Company’s filings and Bloomberg L.P..
(3)
12-month average daily trading volume leading up to and including the Latest Practicable Date,
divided by free float number of shares.
(4)
12-month average daily trading value leading up to and including the Latest Practicable Date, divided
by market capitalisation.
(5)
Market capitalisation figures are based on the total number of issued Shares of the Company.
I-17
With respect to the table above, we note that in the one-year period up to and including
the Last Trading Day and the Latest Practicable Date, the Company’s average daily
trading volume as a percentage of its free float and average daily trading value as a
percentage of its market capitalisation is above the mean and the median liquidity
measure of the top 15 largest companies by market capitalisation traded on the
SGX-ST.
(b)
Liquidity Analysis of the SGX-ST Listed Companies with Market Capitalisation of
between S$900 million and S$1,100 million (1)
Market Cap
(S$ billion)
Company Name
Free
Float(2)
12M ADTV/
Free float(3)
12M ADTV/
Market Cap(4)
UOB-Kay Hian Holdings Limited
1.09
34.72%
0.05%
0.02%
Gallant Venture Ltd.
1.09
13.45%
0.15%
0.02%
Asian Pay Television Trust
1.07
89.00%
0.17%
0.17%
Hong Leong Finance Limited
1.05
44.78%
0.03%
0.01%
OUE Hospitality Trust
1.05
56.21%
0.14%
0.09%
Frasers Hospitality Trust
1.03
40.10%
0.08%
0.03%
Frasers Commercial Trust
1.01
72.83%
0.15%
0.12%
Super Group Ltd.
0.93
19.17%
0.65%
0.17%
Keppel DC REIT
0.92
57.11%
0.57%
0.31%
Ezion Holdings Limited
0.92
55.74%
1.90%
1.73%
Mean
1.02
48.31%
0.39%
0.27%
Median
1.04
50.26%
0.15%
0.11%
Maximum
1.09
89.00%
1.90%
1.73%
Minimum
0.92
13.45%
0.03%
0.01%
Tiger Airways Holdings Limited (one-year
prior to and including the Last Trading
Day)(5)
0.78
44.17%
0.62%
0.28%
Tiger Airways Holdings Limited (one-year
prior to and including the Latest Practicable
Date)(5)
1.01
44.17%
0.72%
0.26%
Sources:
Bloomberg L.P. and companies’ filings
Notes:
(1)
All figures as at the Latest Practicable Date.
(2)
Free float percentages are based on latest Company’s filings and Bloomberg L.P..
(3)
12-month average daily trading volume leading up to and including the Latest Practicable Date,
divided by free float number of shares.
(4)
12-month average daily trading value leading up to and including the Latest Practicable Date, divided
by market capitalisation.
(5)
Market capitalisation figures are based on the total number of issued Shares of the Company.
With respect to the table above, we note that in the one-year period up to and including
the Last Trading Day and the Latest Practicable Date, the Company’s average daily
trading volume as a percentage of its free float is above the mean and the median
liquidity measure and the average daily traded value as a percentage of its market
capitalisation is within the range exhibited by the SGX-ST listed companies with
market capitalisation of between S$900 million and S$1,100 million as at the Latest
Practicable Date, excluding the Company.
I-18
(c)
Historical Trading Volume
As at the Latest Practicable Date, the Company had a free float 11 of approximately
44.2 per cent. The Independent Directors should also note that the average daily
trading volume on the SGX-ST of the Shares is approximately 6,881,122 Shares per
day during the one year period up to and including the Last Trading Day and that the
free float turned 160 times during this period.
We have also considered the historical trading volume of the Shares for the
one-month, two-month, three-month, six-month, nine-month and one-year periods
prior to and including the Last Trading Day and the Latest Practicable Date, and the
period from the Offer Announcement Date to the Latest Practicable Date as set out in
the table below.
Average Daily
Trading Volume
ADTV/
Free float(1)
ADTV/
Market Cap(2)
One-year period prior to and including
the Last Trading Day
6,881,122
0.62%
0.28%
Nine-month period prior to and
including the Last Trading Day
5,842,269
0.53%
0.24%
Six-month period prior to and including
the Last Trading Day
3,969,009
0.36%
0.15%
Three-month period prior to and
3,666,160
0.33%
0.14%
Two-month period prior to and
3,604,426
0.33%
0.14%
Reference Period
One-month period prior to and
3,607,525
0.33%
0.14%
Last Trading Day
10,478,800
0.95%
0.41%
Offer Announcement Date
52,190,000
4.73%
2.09%
One-year period prior to and including
the Latest Practicable Date
7,964,142
0.72%
0.26%
Nine-month period prior to and
including the Latest Practicable Date
6,461,947
0.59%
0.22%
Six-month period prior to and including
the Latest Practicable Date
5,639,293
0.51%
0.19%
Three-month period prior to and
7,028,146
0.64%
0.26%
Two-month period prior to and
8,717,416
0.79%
0.33%
One-month period prior to and
14,447,686
1.31%
0.58%
From Offer Announcement Date to the
16,625,688
1.51%
0.66%
6,657,800
0.60%
0.27%
Source: Bloomberg L.P.
Notes:
11
(1)
Average daily trading volume for the respective periods divided by free float number of shares.
(2)
Average daily trading value for the respective periods divided by market capitalisation.
Free float is calculated based on the issued shares of a company that are held by the public. The term “public” shall
have the meaning ascribed to it in the Listing Manual (“Free Float”).
I-19
Overall, the above analysis suggests that the trading of the Shares does not suffer
from illiquid trading conditions and that the historical market price of the Shares
provides a meaningful reference point for comparison with the Offer Price.
The past liquidity of the Shares especially for the period after the Offer Announcement
Date should not in any way be relied upon as an indication of the future liquidity of the
Shares. There is no assurance that the liquidity of the Shares will remain at these
levels after the Offer closes.
9.5
Precedent Take-over Premia Analysis
We note that it is the intention of the Offeror, and the purpose of the Offer, to privatise and
delist the Company from the Official List of the SGX-ST (the “Proposed Delisting”). The
Offeror intends to make the Company its wholly-owned subsidiary and does not intend to
preserve the listing status of the Company. Accordingly, the Offeror when entitled, intends
to exercise its rights of compulsory acquisition under Section 215(1) of the Companies Act
and does not intend to take steps for any trading suspension of the Shares by the SGX-ST
to be lifted in the event that, inter alia, less than 10% of the Shares (excluding treasury
shares) are held in public hands.
Take-overs of companies listed on the SGX-ST generally fall into the categories of (i)
privatisation transactions, whether by way of scheme of arrangement (“Scheme of
Arrangement” or “SOA”) under Section 210 of the Companies Act, voluntary general offer
under the Code (“Voluntary General Offer” or “VGO”) or mandatory general offer under the
Code (“Mandatory General Offer” or “MGO”), where the offeror intends to acquire the
entire share capital of the target company, leading to the eventual delisting of the target
company from the Official List of the SGX-ST; (ii) delisting offers under Rule 1307 of the
Listing Manual (“Voluntary Delisting” or “VD”) where the primary intention of the offeror is
to delist the target company from the Official List of the SGX-ST.
For the purpose of our evaluation of the financial terms of the Offer, we have compared the
valuation statistics implied by the Offer Price vis-a-vis those in respect of recent selected
privatisations and delistings of companies listed on the SGX-ST Mainboard. We have
selected SOA, VGO, MGO and VD transactions announced and completed between 1
January 2014 and the Latest Practicable Date where the transaction size implied by the
respective offer is greater than S$100 million, regardless of whether the offeror succeeds
in acquiring the entire issued share capital of the target (the “Precedent Privatisations”).
We set out in the table below the premium/discount implied by the offer price of the
Precedent Privatisations in Singapore to the last transacted price and the VWAPs of the
respective targets for the one-month, three-month and six-month periods prior to the
respective offer announcements.
Premium/(Discount) of offer price(15) over/(to)
Company
Singapore Land Ltd.(1)
Olam International Ltd.(2)
China XLX Fertiliser Ltd.(3)
Capitamalls Asia Ltd.(4)
Hotel Properties Ltd.(5)
Goodpack Ltd.(6)
Forterra Trust(7)
Announced
Date
24-Feb-14
14-Mar-14
31-Mar-14
14-Apr-14
14-Apr-14
27-May-14
04-Nov-14
Type
Last
transacted
price (%)
One-month
VWAP (%)
Three-month
VWAP (%)
Six-month
VWAP (%)
VGO
VGO
VD
VGO
MGO
SOA
MGO
11.2
11.8
23.1
31.5
29.4
23.2
32.4
16.9
24.3
28.9
35.8
33.8
30.8
51.1
13.9
33.0
24.8
34.2
35.1
31.3
49.7
11.0
39.9
22.2
27.6
32.2
34.3
39.8
I-20
Premium/(Discount) of offer price(15) over/(to)
Type
Last
transacted
price (%)
One-month
VWAP (%)
Three-month
VWAP (%)
Six-month
VWAP (%)
VGO
VGO
VGO
VGO
VGO
VGO
5.0
18.3
55.3
10.0
20.0
12.6
12.3
20.1
39.1
11.5
25.0
16.5
17.0
17.0
42.6
13.4
28.8
20.2
21.1
16.8
47.5
13.4
28.2
28.1
Mean
Median
Max
Min
21.8
20.0
55.3
5.0
26.6
25.0
51.1
11.5
27.8
28.8
49.7
13.4
27.9
28.1
47.5
11.0
Tiger Airways(14)
32.3
35.3
42.4
36.7
Company
UE E&C Ltd.(8)
CH Offshore Ltd(9)
STATS ChipPAC Ltd.(10)
LCD Global Investments Ltd.(11)
Keppel Land Ltd.(12)
United Envirotech Ltd.(13)
Announced
Date
28-Nov-14
11-Dec-14
30-Dec-14
12-Jan-15
23-Jan-15
05-Mar-15
Sources: Bloomberg L.P. and relevant offer documents. Includes Singapore general offer transactions and
mandatory general offers, excludes scheme of arrangements
Notes:
(1)
Time reference in calculating the premia is 19 February 2014, the last trading day prior to the offer
announcement date.
(2)
Time reference in calculating the premia is 12 March 2014 being the last full day of trading in the shares on
the SGX-ST prior to the offer announcement date.
(3)
Time reference in calculating the premia is 6 December 2013 being the last business day on which the
shares were traded on the SGX-ST and the Hong Kong Stock Exchange prior to the possible offer
announcement date.
(4)
Time reference in calculating the premia is 11 April 2014 being the last full trading day of the shares on the
SGX-ST immediately preceding the offer announcement date.
(5)
Time reference in calculating the premia is 11 April 2014 being the last traded market day prior to the offer
announcement date.
(6)
Time reference in calculating the premia is 18 March 2014 being the last full trading day prior to the holding
announcement date when the company first announced that it has been approached on a possible offer for
the shares.
(7)
Time reference in calculating the premia is 3 November 2014 being the last traded market day prior to the
offer announcement date.
(8)
Time reference in calculating the premia is 21 March 2014 being the last trading date before SGX-ST’s query
regarding the unusual price movements in the shares of the company. On 24 March 2014, SGX-ST initiated
a query regarding the trading activity of the company, and the company responded with a trading halt and
announced that its controlling shareholder, United Engineers Limited, is currently in discussions with a third
party in connection with the sale of its shareholding in the company.
(9)
Time reference in calculating the premia is 10 December 2014 being the last trading day prior to the offer
announcement date.
(10)
Time reference in calculating the premia is 14 May 2014 being the last trading date before SGX-ST’s query
regarding the unusual price movements in the shares of the company. Offer price based on the total of the
offer price and the distribution of US$89,119,520 following the completion of the internal restructuring
exercise.
(11)
Time reference in calculating the premia is 9 January 2015 being the last trading day prior to the offer
announcement date.
(12)
Time reference in calculating the premia is 20 January 2015 being the last full market day preceding the date
of announcement on which the shares were traded on the SGX-ST.
(13)
Time reference in calculating the premia is 1 July 2014 being the last full market day preceding the holding
announcement date when the company announced a holding announcement stating that it has been
approached to explore a potential acquisition of shares in the company.
(14)
Time reference in calculating the premia is 5 November 2015 being the Last Trading Day.
(15)
Offer price based on the final bid price per share.
I-21
Based on the above analysis, we note the following:
(a)
The premium of approximately 32.3% implied by the total of the Offer Price over the
last traded price of the Shares on the Last Trading Day is within the range and higher
than the mean and median premium of 21.8% and 20.0%, respectively, implied by the
respective offer prices paid over the last transacted market prices of the shares on
their respective last trading day with respect to the Precedent Privatisations;
(b)
one-month VWAP of the Shares prior to and including the Last Trading Day is within
the range and higher than the mean and median premium of 26.6% and 25.0%,
respectively, as implied by the respective offer prices over the one-month VWAP of the
shares with respect to the Precedent Privatisations;
(c)
three-month VWAP of the Shares prior to and including the Last Trading Day is within
the range and higher than the mean and the median premium of 27.8% and 28.8%,
respectively, as implied by the respective offer prices over the three-month VWAP of
the shares in respect of the Precedent Privatisations; and
(d)
six-month VWAP of the Shares prior to and including the Last Trading Day is within the
range and higher than the mean and median premium of 27.9% and 28.1%,
respectively, as implied by the respective offer prices over the six-month VWAP of the
shares in respect of the Precedent Privatisations.
The Independent Directors should note that the level of premium (if any) that an acquirer
would normally pay for acquiring and/or privatising a listed company (as the case may be)
varies in different circumstances depending on, inter alia, the attractiveness of the
underlying business to be acquired, the synergies to be gained by the acquirer from
integrating the target company’s businesses with its existing business, the possibility of a
significant revaluation of the assets to be acquired, the availability of substantial cash
reserves, the liquidity in the trading of the target company’s shares, the presence of
competing bids for the target company, the extent of control the acquirer already has in the
target company and prevailing market expectations. Hence, each Precedent Privatisation
should be assessed based on its own merits.
We wish to highlight that the Company is not in the same industry and does not conduct the
same businesses as the other companies in the list of Precedent Privatisations and would
not, therefore, be directly comparable to the list of companies in terms of, inter alia,
geographical markets, composition of business activities, scale of business operations, risk
profile, asset base, capital structure, profitability, valuation methodologies adopted,
accounting policies, track record, future prospects, market/industry size, political risk,
competitive and regulatory environment, financial position and other relevant criteria.
Accordingly, the Independent Directors should note that the above comparison merely
serves as a general guide to provide an indication of the premium or discount in connection
with the Precedent Privatisations. Therefore, any comparison of the Offer with the
Precedent Privatisations is for illustration purposes only. Conclusions drawn from the
comparisons made may not necessarily reflect any perceived market valuation for the
Company.
The list of Precedent Privatisations indicated herein has been compiled based on publicly
available information as at the Latest Practicable Date. The above table captures only the
premium/(discount) implied by the offer prices in respect of the Precedent Privatisations
over the aforesaid periods and does not highlight bases other than the aforesaid in
I-22
determining an appropriate premium/(discount) for the recent Precedent Privatisations. It
should be noted that the comparison is made without taking into account the total amount
of the offer value of each respective Precedent Privatisation or the relative efficiency of
information or the underlying liquidity of the shares of the relevant companies or the
performance of the shares of the companies or the quality of earnings prior to the relevant
announcement and the market conditions or sentiments when the announcements were
made or the desire or the relative need for control leading to compulsory acquisition. MKES
makes no representations or warranties, express or implied, on the accuracy or
completeness of such information.
9.6
Valuation Ratios
We have applied the following valuation ratios in our analysis:
Valuation Multiples
Description
EV/Revenue
“EV” or “enterprise value” is the sum of a company’s market capitalisation,
preferred equity, minority interests, short and long term debt less investments in
associates, and cash and cash equivalents. The EV/Revenue ratio illustrates the
market value of a company’s business relative to its historical revenue, without
regard to the company’s capital structure.
EV/EBITDA
“EV” or “enterprise value” is the sum of a company’s market capitalisation,
preferred equity, minority interests, short and long term debt less investments in
associates, and cash and cash equivalents. “EBITDA” stands for historical
earnings before interest, tax, depreciation and amortization expenses, excluding
share of associates’ and joint ventures’ income and other exceptional items. The
EV/EBITDA ratio illustrates the market value of a company’s business relative to
its historical pre-tax operating cash flow performance, without regard to the
company’s capital structure.
AEV/EBITDAR
“AEV” or “adjusted enterprise value” is the sum of a company’s market
capitalisation, preferred equity, minority interests, short and long term debt and
aircraft and engine operating lease payments capitalized at a factor of 7.0 times
less investments in associates, cash and cash equivalents. “EBITDAR” stands
for historical earnings before interest, tax, depreciation and amortization
expenses and aircraft and engine operating lease payments, excluding share of
associates’ and joint ventures’ income and other exceptional items.
AEV/EBITDAR multiples allow for a comparison of trading multiples independent
of the financing structure of the fleet.
P/B
“P/B” or “price-to-book” multiple illustrates the ratio of the market price of a
company’s shares relative to its historical book net asset value (“NAV”) per
share as recorded in its financial statements. The NAV of a company is
defined as its total assets (including intangible assets and goodwill) less
its total liabilities, and excludes, where applicable, minority interests. The
NAV figure provides an estimate of the value of a company assuming the
sale of all its assets at its book value, the proceeds of which are first used
to settle its liabilities and obligations with the balance available for
distribution to its shareholders. Comparisons of companies using their
book NAVs are affected by differences in their respective accounting
policies, in particular their depreciation and asset valuation policies.
P/E
“P/E” or “price-to-earnings” ratio illustrates the ratio of the market price of a
company’s shares relative to its earnings per share. The P/E ratio is affected by,
inter alia, the capital structure of a company, its tax position as well as its
accounting policies relating to revenues recognition, depreciation and intangible
assets.
In applying the above ratios, we have considered whether the multiples of the Company,
implied by the Offer Price, lie above, within or below the mean and median and minimum
and maximum of the range implied by the relevant ratios considered set out in Sections 9.7
and 9.8 of this letter. We consider each ratio equally and do not view any particular ratio as
more important than others.
I-23
9.7
Trading Comparable Analysis
We have considered the valuation ratios of selected listed companies principally engaged
in the commercial airline industry and regarded as low-cost carriers which are in our
opinion, broadly comparable to the Company (the “Comparable Companies”). A summary
profile of the Comparable Companies is set out below.
(a)
A brief description of the Comparable Companies selected for our analysis is set out
below:
Company
Target Description
Market
Capitalisation
(S$mm)
Southeast Asia low-cost carriers
Cebu Air, Inc. (“Cebu
Pacific”)
Cebu Pacific offers scheduled air travel services to
passengers, as well as airport-to-airport cargo services on
its domestic and international routes. It operates flights to
29 cities in 18 countries in North Asia, the Association of
Southeast Asian Nations (ASEAN), Australia, and the
Middle East. Cebu Pacific also provides ancillary services,
such as cancellation and rebooking options; in-flight
merchandising, including sale of duty-free products on
international flights; baggage services; and travel-related
products and services. Cebu Pacific has a strategic
alliance with Tiger Airways. Cebu Pacific was incorporated
in 1988 and is headquartered in Pasay City, the
Philippines.
1,521
AirAsia Bhd
(“AirAsia”)
AirAsia provides air transportation services primarily in
Malaysia. It operates scheduled passenger flights and
chartered flights; and offers cargo transportation services.
It also engages in tour operating business; and leases
aircraft. AirAsia operates a fleet of 150 Airbus A320
aircraft flying 88 destinations. AirAsia was founded in
2001 and is based in Sepang, Malaysia. AirAsia also holds
45% of the shares of Thai AirAsia Co., Ltd.
1,313
Asia Aviation PCL
(“Asia Aviation”)
Asia Aviation was incorporated on February 14, 2006. It
provides airline services in Thailand. It also offers pointto-point services; and ancillary services. Asia Aviation’s
route network covers a total of 36 cities in 9 countries in
Asia, including 21 international destinations and 15
domestic destinations from its 40 Airbus A320 aircraft
fleet. Asia Aviation was founded in 2004 and is
headquartered in Bangkok, Thailand. Asia Aviation also
holds 55% of the shares of Thai AirAsia Co., Ltd.
889
AirAsia X Bhd
(“AirAsia X”)
AirAsia X is the long-haul, low-cost affiliate carrier of the
AirAsia Group that currently flies to destinations in the
Asia Pacific region. The airline currently serves 18
destinations across Asia, Australia and the Middle East.
AirAsia X operates a core fleet of 26 A330-300s. It has
three additional aircraft for non-scheduled lease and
charter operations. The airline has carried over 10 million
guests since it commenced long-haul service in 2007.
255
Other international low-cost carriers
Southwest Airlines
Co. (“Southwest
Airlines”)
Southwest Airlines operates a major passenger airline that
provides scheduled air transportation in the United States
and near-international markets. Southwest Airlines
commenced service on June 18, 1971. Southwest Airlines
ended 2014 serving 93 destinations in 40 states and five
near-international countries.
I-24
43,084
Market
Capitalisation
(S$mm)
Company
Target Description
Ryanair Holdings
PLC (“Ryanair”)
Ryanair provides scheduled-passenger airline services in
Ireland, the United Kingdom, continental Europe, and
Morocco. It operates more than 1,800 daily flights from 76
bases, connecting 200 destinations in 31 countries on a
fleet of over 300 Boeing 737 aircraft. Ryanair was founded
in 1985 and is headquartered in Swords, Ireland.
27,990
EasyJet PLC
(“EasyJet”)
EasyJet operates as an airline carrier on over 600 routes
across more than 30 countries across Europe with a fleet
of over 200 Airbus aircraft. It is also engaged in trading
and leasing aircrafts. EasyJet was founded in 1995 and is
based in Luton, the United Kingdom.
13,865
JetBlue Airways
Corporation
(“JetBlue”)
JetBlue is a passenger carrier company providing air
transportation services. In 2014, JetBlue carried over 32
million passengers with an average of 825 daily flights and
served 87 destinations in the United States, the Caribbean
and Latin America. JetBlue was incorporated in Delaware
in August 1998, commenced service on February 11,
2000.
11,332
Spring Airlines Co.,
Ltd. (“Spring
Airlines”)
Spring Airlines is the aviation subsidiary of Shanghai
Spring International Travel Service. Spring Airlines is
primarily engaged in the airline transportation of
passengers and freight. It operates domestic and
international routes for passengers and cargoes. Spring
Airlines was founded in 2005 and is based in Shanghai,
China.
9,867
InterGlobe Aviation
Limited (“InterGlobe
Aviation”)
InterGlobe Aviation operates on a low-cost carrier
business model through Indigo and focuses primarily on
the domestic Indian air travel market. InterGlobe Aviation
commenced operations in August 2006 and has a fleet of
96 aircrafts as at 30 April 2015, all of which are Airbus
A320 aircraft.
8,351
Virgin Australia
Holdings Limited
(“Virgin Australia”)
Virgin Australia operates domestic and international
airline business in Australia. It operates through Virgin
Australia Domestic, Virgin Australia International, Velocity,
and Tigerair Australia segments. Virgin Australia’s
aircrafts fly to a range of Australian domestic ports,
including regional network operations, as well as
international destinations comprising of Trans-Pacific,
Middle East, Trans-Tasman, Pacific Island, and South
East Asian routes. It has strategic alliances with Air New
Zealand Limited, Etihad Airways P.J.S.C, Singapore
Airlines Limited, and Delta Air Lines Inc. Virgin Australia
was formerly known as Virgin Blue Holdings Limited and
changed its name to Virgin Australia Holdings Limited in
2011. Virgin Australia was founded in 2000 and is based in
Bowen Hills, Australia.
1,594
SpiceJet Limited
(“SpiceJet”)
SpiceJet is a domestic low-budget air carrier which
provides scheduled flights between major cities in India.
SpiceJet has a fleet size of 58 aircraft covering 51
destinations. SpiceJet was incorporated in 1984 and is
headquartered in Gurgaon, India.
852
Sources: Capital IQ and companies’ filings
I-25
We wish to highlight that the Comparable Companies are not exhaustive and they
differ from the Company in terms of, inter alia, market capitalisation, size of
operations, composition of business activities, geographical spread, track record,
financial performance, operating and financial leverage, risk profile, liquidity, listing
venue, accounting policies, future prospects and other relevant criteria. As such, any
comparison made is necessarily limited and merely serves only as an illustrative
guide. Accordingly, the Comparable Companies may not provide a meaningful basis
for valuation comparison. MKES makes no representations or warranties, express or
implied, on the accuracy or completeness of such information.
(b)
Valuation ratios of the Comparable Companies
Company
Listing
Exchange
Trading
Currency
Stock
Price
(Local
currency)
Market Enterprise
value(2)
Cap(1)
(S$ mm)
(S$mm)
Adjusted
Enterprise
value(3)
(S$ mm)
EV/
EV/
revenue EBITDA(4)
LTM
LTM
AEV/
EBITDAR(4)
LTM
P/E(4)
LTM
P/B
Cebu Pacific(5)
PSE
PHP
84.00
1,521
2,450
3,260
1.5x
8.7x
8.2x
14.4x
2.1x
AirAsia(6)
KLSE
MYR
1.42
1,313
4,852
5,469
2.6x
9.9x
9.5x
NM
1.0x
Asia Aviation(7)
SET
THB
4.66
889
1,500
2,587
1.3x
11.1x
8.9x
15.5x
1.1x
AirAsia X(8)
KLSE
MYR
0.19
255
736
2,189
0.7x
28.6x
9.4x
NM
1.5x
47.04
43,084
42,481
44,916
1.5x
6.3x
6.3x
16.3x
4.4x
4.1x
Other international low-cost carriers
Southwest
Airlines(9)
NYSE
USD
Ryanair(10)
ISE
EUR
14.19
27,990
26,537
27,791
2.9x
10.0x
9.8x
16.1x
EasyJet(11)
LSE
GBP
16.46
13,865
12,942
14,635
1.3x
7.4x
7.3x
11.9x
2.9x
JetBlue(12)
NasdaqGS USD
25.54
11,332
12,463
13,676
1.4x
6.4x
6.5x
19.7x
2.7x
Spring Airlines(13)
SHSE
CNY
InterGlobe
Aviation(14)
BSE
INR
Virgin Australia(15)
ASX
SpiceJet(16)
BSE
56.04
9,867
10,043
NA
5.6x
NA
NA
31.4x
7.0x
1,094.00
8,351
8,626
11,688
2.8x
17.1x
12.4x
24.5x
NM
AUD
0.44
1,594
3,191
5,189
0.7x
10.8x
8.9x
NM
1.4x
INR
67.10
852
1,127
2,107
1.3x
NM
22.7x
NM
NM
1.5x
Mean(17)
1.5x
14.6x
9.0x
14.9x
Median(17)
1.4x
10.5x
9.1x
14.9x
1.3x
Max(17)
2.6x
28.6x
9.5x
15.5x
2.1x
Min(17)
0.7x
8.7x
8.2x
14.4x
1.0x
2.8x
Overall
Mean(17)
2.0x
11.6x
10.0x
18.7x
Median(17)
1.4x
10.0x
8.9x
16.2x
2.4x
Max(17)
5.6x
28.6x
22.7x
31.4x
7.0x
Min(17)
0.7x
6.3x
6.3x
11.9x
1.0x
Tiger Airways (at SGX-ST
last traded price
Prior to Offer
Announcement)(18)
SGD
0.31
783
775
1,321
1.1x
20.6x
11.4x
NM
3.7x
SIA(19)
SGX-ST
SGD
10.18
11,842
6,382
12,706
0.4x
3.2x
4.4x
22.0x
0.9x
Tiger Airways (at
Offer Price)(20)
SGX-ST
SGD
0.41
1,035
1,028
1,574
1.5x
27.3x
13.6x
NM
4.9x
Sources: Bloomberg L.P., Capital IQ and companies’ financials and filings
Notes:
(1)
Market capitalisation is calculated based on share price from Capital IQ as at the Latest Practicable Date multiplied by total ordinary
shares outstanding and foreign exchange conversion rates as at the Latest Practicable Date.
I-26
(2)
Enterprise value has been calculated as market capitalisation + net debt + minority interest – interest in associates.
(3)
Adjusted enterprise value has been calculated as market capitalisation + net debt + minority interest – interest in associates + 7 times
aircraft and engine operating lease payment.
(4)
EBITDA, EBITDAR and net income attributable to equity holders of the company have been adjusted for one-off and extraordinary
items per footnotes below. Tax effect on these adjustments applied using marginal tax rate as disclosed in the company filings.
(5)
Financial information reflects data for the last twelve months (“LTM”) for the period ended 30 September 2015. Enterprise value has
been adjusted for pension liabilities and investment in joint venture. Net income figure has been adjusted for foreign exchange
gain/loss and loss on sale of aircraft. Tax effect on these adjustments applied using statutory tax rate of 30%.
(6)
Financial information reflects data for the last twelve months for the period ended 30 September 2015. Enterprise value has been
adjusted for AFS financial assets and derivative financial instruments (foreign currency contracts and interest rate contracts).
EBITDA figure has been adjusted for gain on disposal of property, plant and equipment and gain on disposal of available-for-sale
financial assets. Negative net income reported for AirAsia for the last twelve months for the period ended 30 September 2015.
(7)
adjusted for short-term and long-term investments and employee benefit obligations. Net income figure has been adjusted for foreign
exchange gain/loss. Tax effect on these adjustments applied using statutory tax rate of 20%.
(8)
Financial information reflects data for the last twelve months for the period ended 30 September 2015. EBITDA has been adjusted
for penalty on early termination of term loan, impairment of receivables, property, plant and equipment written off, foreign exchange
loss, gain on disposal of aircraft and engine. Negative net income reported for AirAsia X for the last twelve months for the period
ended 30 September 2015.
(9)
Financial information reflects data for the last twelve months for the period ended 30 September 2015. EBITDA and net income
figures have been adjusted for acquisition and integration costs, labor ratification bonuses, special revenue adjustment and litigation
settlement. Tax effect on these adjustments applied using statutory tax rate of 39%.
(10)
adjusted for short-term financial assets. Net income figure has been adjusted for foreign exchange gain/loss and gain on disposal
of available for sale financial asset. Tax effect on these adjustments applied using statutory tax rate of 12.5%.
(11)
Financial information reflects data for the last twelve months for the period ended 30 September 2015.
(12)
adjusted for short-term and long-term investments. EBITDA figure has been adjusted for insurance recovery for a damaged engine,
gain from sale of an engine and gain from one-time legal settlement. Net income figure has been adjusted for insurance recovery
for a damaged engine, gain from sale of an engine, gain from one-time legal settlement and gain on sale of a subsidiary. Tax effect
on these adjustments applied using statutory tax rate of 35%.
(13)
Financial information reflects data for the last twelve months for the period ended 30 September 2015. Depreciation and amortisation
and aircraft and engine operating lease payment data is not available for the last nine months ended 30 September 2014 and 30
September 2015. Net income figure has been adjusted for gain/loss on disposal of assets. Tax effect on these adjustments applied
using statutory tax rate of 25%.
(14)
Financial information reflects data for the last twelve months for the period ended 30 June 2015. Enterprise value has been adjusted
for long-term investment. Negative shareholders’ funds reported for the period ended 30 June 2015.
(15)
Financial information reflects data for the last twelve months for the period ended 30 June 2015. EBITDA has been adjusted for
foreign exchange gain, restructuring and transaction costs and impairment losses. Negative net income reported for Virgin Australia
for the last twelve months for the period ended 30 June 2015.
(16)
Financial information reflects data for the last twelve months for the period ended 30 September 2015. Negative EBITDA, net income
and negative shareholders’ funds reported for SpiceJet for the last twelve months for the period ended 30 September 2015.
(17)
Multiples that are non-meaningful (“NM”) or are not available (“NA”) are excluded from the computation of the mean, median, max
and min.
(18)
Implied equity value is calculated using the last traded price of S$0.31 per Share as quoted on the SGX-ST on the Last Trading Day
and the fully diluted share capital of Tiger Airways had all Shares under the PCCS and the Options been issued. Financial information
reflects data for the last twelve months for the period ended 30 September 2015. Enterprise value has been adjusted for long-term
investment. EBITDA figure has been adjusted for exchange gain/loss. Negative earnings reported for Tiger Airways for the last twelve
months for the period ended 30 September 2015.
(19)
adjusted for short-term investment. EBITDA and net income figures have been adjusted for exceptional items, surplus/loss on
disposal of aircraft, spares and spare engines, other non-operating items, impairment of property, plant and equipment,
compensation for changes in aircraft delivery slots, amortisation of deferred gain on sale and operating leaseback transactions,
surplus on disposal of short-term investments, bad debts written off, impairment of trade debtors, net exchange loss, writedown on
inventories, overprovision/underprovision of tax in respect of prior years. Tax effect on these adjustments applied using statutory tax
rate of 17%.
(20)
Implied equity value is calculated using the Offer Price of S$0.41 per Share and the fully diluted share capital of Tiger Airways had
all Shares under the PCCS and the Options been issued. Financial information reflects data for the last twelve months for the period
ended 30 September 2015. Enterprise value has been adjusted for long-term investment. EBITDA figure has been adjusted for
exchange gain/loss. Negative earnings reported for Tiger Airways for the last twelve months for the period ended 30 September 2015.
The Independent Directors should note that the analysis of trading multiples indicates that
the equivalent LTM EV/EBITDA, LTM AEV/EBITDAR and P/B multiples for the Company
implied by the Offer Price are above the mean and median indicated by the Comparable
Companies set out above. The equivalent LTM EV/Revenue multiple for the Company
implied by the Offer Price is within the range indicated by the Comparable Companies set
out above.
I-27
9.8
Precedent Transaction Analysis
We have reviewed selected transactions completed between 1 January 2013 and the Latest
Practicable Date, involving the acquisitions of equity interests in selected companies that
operate in the commercial airline industry and for which information is publicly available (the
“Precedent Transactions”). Furthermore, in order to compile a list of representative
transactions, we have included transactions where the transaction sizes are more than
S$100 million and the acquirer acquired secondary shares in the target company.
(a)
A brief description of the target companies in the Precedent Transactions selected for
our analysis is set out below:
Target
Date of
announcement
Target description
(at time of acquisition)
Stake
acquired
Asia Pacific Transactions
Xiamen Airlines
Company Limited
(“Xiamen Airlines”)
20-Jun-15
Xiamen Airlines provides passenger and cargo air
transportation services. It operates more than 220
domestic routes, and almost 50 international and
regional routes, and flies more than 3,200 flights
each week. With bases in Xiamen, Fuzhou and
Hangzhou, Xiamen Airline’s flight network covers
major cities in China and extends to Hong Kong,
Macao, Taiwan and Southeast Asian countries.
Xiamen Airlines has six branches in Fuzhou,
Hangzhou, Tianjin, Nanchang, Beijing, and Hunan,
one operation base in Quanzhou, 48 domestic and
international business departments and offices and
owns Hebei Airlines as its subsidiary. Xiamen Airlines
has a fleet of 123 aircraft with a total of 20,555 seats,
and an average airplane service age of 5.61 years.
Xiamen Airlines was founded in 1984 and is based in
Xiamen, China.
15.0%
Tianjin Airlines Co.,
Ltd. (“Tianjin
Airlines”)
14-Apr-15
Tianjin Airlines provides air transportation services. It
was formerly known as Grand China Express Airlines
Company Ltd. and changed its name to Tianjin
Airlines Co., Ltd. On June 8th, 2009, Tianjin Airlines
was established with co-investment from HNA Group
company Ltd, Tianjin Duty-free Zone Investment
Company Ltd and Hainan Airlines Co., Ltd. Tianjin
Airlines is based in Tianjin, China.
48.2%
Philippine Airlines
Inc (“PAL”), Air
Philippines
Corporation
(“AirPhil”)
08-Sep-14
PAL, the Philippine national flag carrier, is primarily
engaged in air transport of passengers and cargo
within the Philippines and several international
destinations. AirPhil owns and operates an airline
under the PAL Express brand name. The transaction
was completed through sale of the 49% equity
interest
in Trustmark
Holdings
Corporation
(“Trustmark”) and Zuma Holdings and Management
Corporation (“Zuma”), which represented indirect
ownership interests of 43.23% and 48.98% in PAL
and AirPhil, respectively as well as the sale of stakes
in the relevant asset owning entities.
49.0%
Malaysian Airline
System Bhd
(“Malaysian Airline
System”)
08-Aug-14
Malaysian Airline System is a public limited liability
company, incorporated and domiciled in Malaysia.
The holding company is Khazanah Nasional Berhad
which is incorporated and domiciled in Malaysia.
Malaysian Airline System is principally engaged in
the business of air transportation and the provision of
related services.
30.6%
I-28
Date of
announcement
Target description
Hebei Airlines Co.
Ltd (“Hebei
Airlines”)
17-Jul-14
Hebei Airlines is a company incorporated in China
and its principal business activity is the operation of
international and domestic air routes, and cargo, mail
and luggage transportation business; agency
business between airlines; service business related
to air transportation; provision of general aviation
services; aircraft management business; aircraft
maintenance; agency business between airlines, and
ground service; in-flight duty free goods; aircraft
leasing and sales agent for aviation accident
insurance; aviation food producing and sale,
insurance industry and agency services; other
aviation business and related business, including
advertising for such businesses; logistics, trading
and storage.
95.4%
Air New Zealand
Limited (“Air New
Zealand”)
20-Nov-13
Air New Zealand provides passenger and cargo air
transportation services on scheduled airlines
primarily in New Zealand, Australia, the Pacific
Islands, the United Kingdom, Europe, Asia, North
America, and Europe. Air New Zealand was formerly
known as Tasman Empire Airways Limited and
changed its name to Air New Zealand Limited in April
1965. Air New Zealand was founded in 1940 and is
based in Auckland, New Zealand.
20.0%
Tianjin Airlines
19-Oct-13
Tianjin Airlines provides air transportation services. It
was formerly known as Grand China Express Airlines
Company Ltd. and changed its name to Tianjin
Airlines Co., Ltd. On June 8th, 2009, Tianjin Airlines
was established with co-investment from HNA Group
company Ltd, Tianjin Duty-free Zone Investment
Company Ltd and Hainan Airlines Co., Ltd. Tianjin
Airlines is based in Tianjin, China.
14.0%
Virgin Australia
Holdings Limited
(“Virgin Australia”)
24-Apr-13
Virgin Australia operates domestic and international
airline business in Australia. It operates through
Virgin
Australia
Domestic,
Virgin
Australia
International, Velocity, and Tigerair Australia
segments. It flies to a range of Australian domestic
ports, including regional network operations, as well
as international destinations comprising of TransPacific, Middle East, Trans-Tasman, Pacific Island,
and South East Asian routes. It has strategic
alliances with Air New Zealand Limited, Etihad
Airways P.J.S.C, Singapore Airlines Limited, and
Delta Air Lines Inc. Virgin Australia was formerly
known as Virgin Blue Holdings Limited and changed
its name to Virgin Australia Holdings Limited in 2011.
Virgin Australia was founded in 2000 and is based in
Bowen Hills, Australia.
9.9%
Tiger Airways
20-Dec-13
Tiger Airways was incorporated in the Republic of
Singapore on 1 February 2007 and is a public limited
company. Tiger Airways is a budget carrier which
operates flights to destinations in Asia.
7.3%
Target
I-29
Stake
acquired
Date of
announcement
Target description
International
Consolidated
Airlines Group, S.A.
(“IAG”)
(30-Jan-15),
(26-June-13)
IAG together with its subsidiaries, provides
passenger and cargo transportation services in the
United Kingdom, Spain, the United States, and rest
of the world. Formed in January 2011, IAG is the
parent company of Aer Lingus, British Airways, Iberia
and Vueling. IAG is a Spanish registered company
with corporate office in London, United Kingdom.
10.0%,
(30 Jan
15)
12.1%
(26 Jun
13)
Aer Lingus Group
plc (“Aer Lingus”)
18-Dec-14
Aer Lingus, together with its subsidiaries, provides
air travel services in the Ireland. It offers passenger
and cargo transportation services from Ireland to the
United Kingdom, Europe, and the United States. Aer
Lingus was founded in 1936 and is headquartered in
Dublin, Ireland.
98.1%
Target
Stake
acquired
Global Transactions
Sources: Relevant offer documents and companies’ filings
(b)
Precedent Transactions
The Precedent Transactions are provided for illustrative purposes only. The Precedent
Transactions and the acquired companies may not be directly comparable with the
Company and may vary with respect to, amongst other factors, the geographical
spread of activities, business mix and model, scale of operations, asset intensity,
accounting policies, risk profile, track record and future prospects. Accordingly, the
Precedent Transactions may not provide a meaningful basis for valuation comparison.
We further wish to highlight that underlying financial data used to calculate the,
EV/Revenue, EV/EBITDA and P/B multiples in our analysis have been extracted from
the relevant companies’ financials and filings as at the relevant announcement date of
each transaction. MKES makes no representations or warranties, express or implied,
on the accuracy or completeness of such information.
Announced
Target
Asia Pacific Transactions (1)
20-Jun-15
Xiamen
Airlines (2)
14-Apr-15
08-Sep-14
08-Aug-14
17-Jul-14
20-Nov-13
19-Oct-13
24-Apr-13
Tianjin
Airlines (3)
PAL,
AirPhil (4)
Malaysian
Airline
System(5)
Hebei
Airlines (6)
Air New
Zealand (7)
Tianjin
Airlines (8)
Virgin
Australia (9)
%
Acquired
Acquirer
Deal
value
(S$mm)
Enterprise
EV/
value
Revenue
(S$mm)
LTM
EV/
EBITDA
LTM
P/B
LTM
Xiamen C&D
Corporation
Limited
Hainan Airlines
Co., Ltd
Lucio C. Tan
Group of
Companies
Khazanah
Nasional Berhad
15.0%
473
2,879
0.8x
NA
1.4x
48.2%
1,750
5,128
3.2x
17.7x
1.5x
49.0%
1,113
NA
NA
NA
3.7x
30.6%
539
5,267
0.9x
NM
1.4x
Xiamen Airlines
Company Limited
Group of investors
95.4%
136
497
2.2x
NM
0.5x
20.0%
377
2,058
0.4x
2.7x
1.0x
Hainan Airlines
Co., Ltd
Singapore Airlines
Limited
14.0%
222
3,698
3.5x
13.1x
1.1x
9.9%
156
2,874
0.6x
7.0x
1.1x
1.7x
0.9x
3.5x
0.4x
10.1x
10.0x
17.7x
2.7x
1.5x
1.3x
3.7x
0.5x
Mean
Median
Max
Min
I-30
Announced
Target
EV/
Enterprise
Revenue
value
LTM
(S$mm)
EV/
EBITDA
LTM
%
Acquired
Deal
value
(S$mm)
Qatar Airways
IAG
10.0%
98.1%
2,034
2,180
25,380
1,287
0.8x
0.5x
6.3x
5.1x
3.8x
1.7x
Not Disclosed
12.1%
1,125
11,954
0.4x
6.9x
1.2x
0.6x
0.5x
0.8x
0.4x
6.1x
6.3x
6.9x
5.1x
2.2x
1.7x
3.8x
1.2x
1.3x
0.8x
3.5x
0.4x
8.4x
6.9x
17.7x
2.7x
1.7x
1.4x
3.8x
0.5x
Acquirer
P/B
LTM
Global Transactions (1)
IAG (10)
Aer
Lingus(11)
IAG (12)
30-Jan-15
18-Dec-14
26-Jun-13
Mean
Median
Max
Min
Overall
Overall
Overall
Overall
Mean
Median
Max
Min
20-Dec-13
Tiger
Airways (13)
SIA
7.3%
49
925
1.0x
18.9x
1.7x
06-Nov-15
Tiger
Airways (14)
SIA
44.8%
464
1,028
1.5x
27.3x
4.9x
Sources:
Relevant Offer Documents, Mergermarket, Capital IQ and companies’ financials and filings for selected transactions
announced since January 2013
Notes:
(1)
Multiples that are NM or NA are excluded from the computation of the mean, median, max and min. NM indicates negative
multiples.
(2)
As per the announcement, Xiamen C&D Corporation Limited agreed to purchase an additional 15% equity interest in Xiamen
Airlines at a consideration price of RMB2.2 billion. Financial information reflects data for the last twelve months for the period
ended 31 December 2014. Enterprise value has been adjusted for long-term investments.
(3)
As per the announcement, Hainan Airlines agreed to purchase 48.2% equity interest in Tianjin Airlines for RMB8 billion.
Financial information reflects data for the last twelve months for the period ended 31 December 2014. Enterprise value has
been adjusted for long-term investments. EBITDA figure has been adjusted for asset value impairment and investment return.
(4)
Based on disclosures made by San Miguel Corporation confirming the (i) sale of the 49% equity interest in Trustmark and
Zuma, including indirect ownership interests of 43.23% and 48.98% in PAL and AirPhil, respectively; and (ii) sale of the equity
interest and cancellation of subscription rights on the shares of stock of Fortunate Star Limited (“Fortunate Star”) for an
aggregate consideration of US$874 million or an equivalent of PHP38,616 million. Book value based on the sum of net asset
values of Trustmark and Zuma and the carrying value of the equity stake in Fortunate Star as of 31 December 2013.
(5)
Deal value is based on offer price of RM0.27 per share as per announcement dated 08 August 2014. Malaysian Airline
System’s ordinary shareholders, other than Khazanah Nasional Berhad, will receive a total repayment amount of
RM1,381,965,840 which represents a cash amount of RM0.27 for each ordinary share of RM0.10 in Malaysian Airline System
under the selective capital reduction and repayment exercise of Malaysian Airline System. Financial information reflects data
for the last twelve months for the period ended 30 June 2014 for Malaysian Airline System. Enterprise value has been
adjusted for long-term investments. Perpetual Sukuk has been treated as equity. Negative EBITDA reported for Malaysian
Airline System for the last twelve months for the period ended 30 June 2014.
(6)
Xiamen Airlines agreed to purchase a 95.4% equity interest in Hebei Airlines for a total consideration of RMB680 million.
been adjusted for finance lease. EBITDA figure has been adjusted for impairment loss.
(7)
A group of investors acquired a 20% stake in Air New Zealand at NZD1.68 per share for approximately NZD365 million.
Financial information reflects data for the last twelve months for the period ended 30 June 2013. Enterprise value has been
adjusted for investment in quoted equity instruments and other entities. EBITDA has been adjusted for loss on disposal of
property, plant and equipment, intangibles and assets held for resale, impairment on property, plant and equipment,
intangibles and assets held for resale, foreign exchange gain and loss on foreign exchange derivatives.
(8)
As per the announcement, Hainan Airlines agreed to purchase 14.0% equity interest in Tianjin Airlines for RMB1,093 million.
been adjusted for long-term investment and finance lease.
(9)
Implied equity value is calculated based on an offer price of A$0.48 per Virgin Australia share. Financial information reflects
data for the last twelve months for the period ended 31 December 2012.
(10)
Qatar Airways Limited acquired a 9.99% stake in IAG for approximately GBP1.0 billion (or approximately EUR1.3 billion
converted at the exchange rate as at the date of the announcement). Financial information reflects data for the last twelve
months for the period ended 31 December 2014. Enterprise value has been adjusted for non-current assets held for sale.
EBITDA figure has been adjusted for foreign currency loss.
(11)
As per the announcement dated 2 September 2015, IAG received valid acceptance of 529,779,029 Aer Lingus shares,
representing 98.1% of the existing issued share capital of Aer Lingus. Each Aer Lingus shareholder will receive EUR2.55 in
cash per Aer Lingus share comprising a cash payment of EUR2.50 per share and a cash dividend of EUR0.05 per share.
Financial information reflects data for the last twelve months for the period ended 30 June 2014 due to lack of disclosures
for the period ended 30 September 2014. EBITDA figure has been adjusted for realised gains on forward foreign currency
contracts and net foreign exchange losses on operating activities.
(12)
Bankia, SA., Investment Arm sold its 12.1% stake in IAG for approximately EUR680 million. Financial information reflects
data for the last twelve months for the period ended 31 December 2012 due to lack of disclosures for the period ended 31
March 2013. Enterprise value has been adjusted for available-for-sale financial assets.
(13)
Deal value is calculated using the offer price of S$0.67788 per Share and 72,334,350 Shares acquired by SIA (as disclosed
in the announcement by SIA dated 20 December 2013). Percentage acquired is based on the total issued share capital of
Tiger Airways as at the announcement date. Implied equity value is calculated using the offer price of S$0.67788 per Share
I-31
and the fully diluted share capital of Tiger Airways had all Shares under the PCCS and the Options been issued. Financial
information reflects data for the last twelve months for the period ended 30 September 2013. Enterprise value has been
adjusted for long-term investment. EBITDA figure has been adjusted for exchange gain and loss. Tigerair Australia’s financial
results were consolidated under Tiger Airways up to 7 July 2013 when Tiger Airways subsequently disposed its 60% interest
in Tigerair Australia. While deal value is less than S$100 million, transaction is included for reference given that SIA was the
acquirer and Tiger Airways was the target company.
(14)
Deal value is calculated using the Offer Price of S$0.41 per Share and the fully diluted share capital of Tiger Airways
excluding Shares held by SIA and parties acting in concert with it as at the Latest Practicable Date. Percentage acquired is
computed by dividing the total number of Shares SIA would have acquired assuming full acceptance is attained for the Offer,
PCCS Offer and Options Proposal by the fully diluted share capital of Tiger Airways had all Shares under the PCCS and the
Options been issued. Financial information reflects data for the last twelve months for the period ended 30 September 2015.
Enterprise value has been adjusted for long-term investment. EBITDA figure has been adjusted for exchange gain and loss.
The Independent Directors should note that the analysis of Precedent Transaction
multiples indicates that the equivalent LTM EV/EBITDA and P/B multiples for the
Company implied by the Offer Price are above the mean and median indicated by the
Precedent Transactions set out above. The equivalent LTM EV/Revenue multiple for
the Company implied by the Offer Price is within the range indicated by the Precedent
Transactions set out above.
9.9
Broker Research Price Targets for the Shares
We have reviewed certain research reports by research brokers in relation to the Shares as
compiled from Bloomberg L.P., Thomson Research and research reports available to us.
The table below summarises the key points of various research notes and reports:
Brokers
research price
targets for
Tiger as at:
Broker
Last Trading Day
(05 November 2015)
Date
Target
Price (S$)
Rating
Date
Rating
Target
Price (S$)
0.27(1)
OCBC
Investment
Research
5-Nov-15
Sell
0.27
6-Nov-15
Accept the
offer
Morgan Stanley
26-Oct-15
Equal-weight
0.27
–
–
–
UOB Kay Hian
26-Oct-15
Hold
0.31
–
–
–
RHB
26-Oct-15
Neutral
0.30
9-Nov-15
Take profit
Credit Suisse
23-Oct-15
Underperform
0.25
–
–
J.P. Morgan
23-Oct-15
Overweight
0.35
6-Nov-15
Overweight
0.35
CIMB
23-Oct-15
Reduce
0.19
8-Nov-15
Hold
0.41
DBS Vickers
23-Oct-15
Buy
0.36
–
–
Mean
0.29
Source: Bloomberg L.P. and Thomson Research
Note:
(1)
Represents the estimated fair value of Tiger Airways’ Share as disclosed in the research report.
I-32
0.41
–
–
0.36
Based on the above, we note that:
(a)
The Offer Price represents a premium of 42.6% to the average price Share target
estimates by brokers as at the Last Trading Day; and
(b)
The Offer Price represents a premium of 13.9% to the average Share price target
estimates released by brokers between the Offer Announcement Date and the Latest
Practicable Date.
We wish to highlight that the above broker research reports are not exhaustive and the
estimated price target for the Shares and other statements/opinions in these reports
represent the individual views of the respective brokers (and not MKES) based on the
circumstances (including inter alia, market, economic, industry and monetary conditions as
well as market sentiment and investor perceptions regarding the future prospects of the
Company) prevailing at the date of the publication of the respective equity research reports.
The opinions of the brokers may change over time as a result of, among other things,
changes in market conditions, the Company’s corporate developments and the emergence
of new information relevant to the Company. As such the estimated price targets in these
equity research reports may not be an accurate prediction of future market prices of the
Shares.
9.10 Assessment of the Option to Subscribe
We refer to the terms and conditions of the Shares Option to Subscribe and PCCS Option
to Subscribe set out in Appendix 4 of the Offer Document. Please note that our assessment
on the Shares Option to Subscribe in this section of the letter is also applicable to the PCCS
Option to Subscribe.
As set out in paragraph 2.3 of the Offer Document, each Accepting Shareholder will be
granted a non-transferable Shares Option to Subscribe for the Offeror Shares in the capital
of the Offeror on the following principal terms and conditions:
(a)
the Shares Option to Subscribe will only be granted to the Accepting Shareholder if the
Offer becomes or is declared to be unconditional in all respects in accordance with its
terms;
(b)
the Shares Option to Subscribe will be exercisable by the Accepting Shareholder at
any time during the OTS Exercise Period, which will commence on a date to be
announced by the Offeror after the Final Settlement Date. The Offeror Shares will only
be issued to the Accepting Shareholder if the Accepting Shareholder has validly
exercised the Shares Option to Subscribe during the OTS Exercise Period. For the
avoidance of doubt, if the Shares Option to Subscribe is not validly exercised by the
Accepting Shareholder during the OTS Exercise Period, the Shares Option to
Subscribe will lapse and be null and void;
(c)
the subscription price of the Offeror Shares payable by the Accepting Shareholder
exercising the Shares Option to Subscribe will be S$11.1043 for each Offeror Share;
and
I-33
(d)
the maximum number of Offeror Shares which the Accepting Shareholder may
subscribe for pursuant to the Shares Option to Subscribe will be determined as follows
(rounded down to the nearest whole Offeror Share):
Where:
“A” =
Total Offer Price paid or payable to the Accepting Shareholder pursuant to the
terms of the Offer in respect of all the Offer Shares validly tendered by such
Accepting Shareholder in acceptance of the Offer
“B” =
The indicative terms and conditions of the Shares Option to Subscribe are set out in
Appendix 4 to the Offer Document. Details relating to the Offeror Shares to be issued
and/or transferred pursuant to the valid exercise of the Shares Option to Subscribe by
Accepting Shareholders are set out in paragraph 8.3 of the Offer Document.
As set out in paragraph 3.3 of the Offer Document, each Accepting PCCS Holder will
be granted a non-transferable PCCS Option to Subscribe for the Offeror Shares, and
the terms of such PCCS OTS are set out therein.
We note that the Option to Subscribe is available only to Accepting Shareholders and
Accepting PCCS Holders in the event the Offer turns unconditional. Hence any
Shareholders or PCCS Holders that do not accept the offer and instead sell their
Shares or PCCS in the open market will not be entitled to receive the Option to
Subscribe.
Theoretical Realizable Value Analysis
We have evaluated the Option to Subscribe based on a theoretical realizable value of
the offer proceeds which is illustrated in the section below. While we note that a
traditional option could be valued with a Black-Scholes option-pricing model 12, this
model is not appropriate to evaluate the Option to Subscribe as the Option to
Subscribe is personal to the Accepting Shareholder/Accepting PCCS Holder to whom
it is granted and shall not be transferred, charged, assigned, pledged or otherwise
disposed of, in whole or in part, unless with the prior approval of SIA. As such, the
Black-Scholes option-pricing model is not relevant as the Accepting Shareholder or
Accepting PCCS Holder who is granted such an option would not be able to monetize
the Option to Subscribe in the open market.
In view of the above, we are of the opinion that the Option to Subscribe may be
evaluated as an option to invest in the Offeror Shares with proceeds received from
accepting the Offer, based on the respective investment objectives and profiles of
each investor.
12
Black-Scholes option-pricing model, which is traditionally used for pricing options, requires input of various factors
such as exercise period, exercise price as well as other subjective assumptions, including but not limited to the spot
price of the underlying stock on the date of granting and pricing of the option, the expected volatility of the underlying
stock price and the term of the option. As at the Latest Practicable Date, there is no specified grant date for the
Option to Subscribe and hence there is no visibility on the spot price of the Offeror Shares during the OTS Exercise
Period. Therefore, the calculated option price would vary if factors change and different assumptions are used. The
only finalised inputs at the Latest Practicable Date are the exercise period (OTS Exercise Period) and the exercise
price (Subscription Price).
I-34
We have evaluated the theoretical realizable value of the Option to Subscribe under
various possible future price outcomes of the Offeror Shares as illustrated below.
Illustrative Realizable Value Analysis
Accepting Shareholders and Accepting PCCS Holders who are granted the Option to
Subscribe may realize its value only through sale of the subscribed Offeror Shares
received upon exercise of the Option to Subscribe. Assuming no transaction cost, the
theoretical realizable value of the Option to Subscribe at various illustrative Offeror
Share price levels are set out in the tables below.
We note that the Offeror Share price as at the Latest Practicable Date is below the
Subscription Price. Investors may not be able to realize value immediately upon
exercise of Option to Subscribe when the prevailing market price of the Offeror Share
is below Subscription Price, as such investors can purchase the Offeror Shares at a
lower price on market.
We also note that the number of Offeror Shares which the Accepting Shareholder or
Accepting PCCS Holder may subscribe for pursuant to the Option to Subscribe will be
rounded down to the nearest whole Offeror Share. As stated in paragraph 8.1 of the
Offer Document, the Accepting Shareholders and the Accepting PCCS Holders who
wish to exercise the Option to Subscribe may exercise the Option to Subscribe in full
or in part, and have the flexibility to choose to subscribe for whole board lots of Offeror
Shares and, accordingly, avoid being issued with odd lots of Offeror Shares which may
be less liquid than board lots of Offeror Shares.
Illustrative Theoretical Realizable Value (1) for 1,000 Tiger Airways Shares
Latest Practicable
Date (2)
Subscription
Price
52 Week
High (2)
Illustrative Offeror Share Price (S$)
A
10.1800
11.1043
12.9100
Subscription Price (S$)
B
11.1043
11.1043
11.1043
Cash Proceeds from Offer Price (3) (S$)
C
410.00
410.00
410.00
36
36
36
399.75
399.75
399.75
Number of Offeror Shares under the
Option to Subscribe (4)
Cash Required to Subscribe to Offeror
Shares (S$)
D = C/B,
rounded down
to whole share
E=BxD
Remaining Cash (S$)
F=C–E
10.25
10.25
10.25
Cash Proceeds from Selling
Subscribed Offeror Shares at
Illustrative Offeror Share Price (A)
(S$)
G=AxD
366.48
399.75
464.76
Realizable Value (S$)
H=F+G
376.73
410.00
475.01
Difference between Realizable Value (H)
and Cash Proceeds from Offer Price (C)
(S$)
I=H–C
-33.27
0.00
65.01
I-35
Latest Practicable
Date (2)
Subscription
Price
52 Week
High (2)
12.9100
A
10.1800
11.1043
B
11.1043
11.1043
11.1043
C
4,100.00
4,100.00
4,100.00
369
369
369
4,097.49
4,097.49
4,097.49
D = C/B,
rounded down
to whole share
Shares (S$)
E=BxD
Remaining Cash (S$)
F=C–E
2.51
2.51
2.51
(S$)
G=AxD
3,756.42
4,097.49
4,763.79
H=F+G
3,758.93
4,100.00
4,766.30
(S$)
I=H–C
-341.07
0.00
666.30
Latest Practicable
Date (2)
Subscription
Price
52 Week
High (2)
A
10.1800
11.1043
B
11.1043
11.1043
11.1043
C
20,500.00
20,500.00
20,500.00
1,846
1,846
1,846
D = C/B,
rounded down
to whole share
12.9100
Shares (S$)
E=BxD
20,498.54
20,498.54
20,498.54
Remaining Cash (S$)
F=C–E
1.46
1.46
1.46
(S$)
G=AxD
18,792.28
20,498.54
23,831.86
H=F+G
18,793.74
20,500.00
23,833.32
(S$)
I=H–C
-1,706.26
0.00
3,333.32
Notes:
(1)
Calculation does not take into account transaction costs as well as any potential discount resulting
from odd lots.
(2)
As at the Latest Practicable Date.
(3)
Calculated by multiplying number of Shares held by the Offer Price.
(4)
Assumes the Accepting Shareholder or Accepting PCCS Holder exercises the Option to Subscribe in
full.
The chart below indicates the historical share price of Offeror Shares for the one-year
period prior to and including the Latest Practicable Date. We note that in this period,
Offeror Shares have traded above the Subscription Price for 143 days, representing
57.4% of the trading days during the period.
I-36
Share Performance of Offeror Shares for the one-year period prior to and including the
13.50
Max SIA Price (LTM) = S$12.91
13.00
SIA Share Price (S$)
12.50
Offeror Price > Subscription Price
57.4% of the time (LTM)
(143 days)
12.00
11.50
Subscription Price = S$11.1043
11.00
10.50
10.00
Offeror Price < Subscription Price
42.6% of the time (LTM)
(106 days)
9.50
9.00
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Historical trading prices may not be an appropriate guide for future trading price of the
Offeror Shares. MKES’ opinion does not, in any manner, comment on the prices at
which the Offeror Shares may trade following consummation of the transaction or any
time in the future.
As stated in paragraph 8.1 of the Offer Document, the Accepting Shareholders and the
Accepting PCCS Holders will have the flexibility to decide how they wish to utilise their
cash consideration, whether to acquire the Offeror Shares through the exercise of the
Option to Subscribe or through the open market or not at all.
In addition, as stated in paragraph 11 of the Offer Document, the Accepting
Shareholders and the Accepting PCCS Holders who wish to remain invested in the
long-term prospects of the SIA Group can, subject to the Offer becoming or being
declared to be unconditional in all respects in accordance with its terms, exercise the
Option to Subscribe. The Option to Subscribe also provides Shareholders and PCCS
Holders with an opportunity to share in the future of Tiger Airways through a stake in
SIA.
We wish to emphasise that the decision to exercise the Option to Subscribe
represents an investment decision for the Accepting Shareholders and
Accepting PCCS Holders, that is separate from the decision on whether to
accept the Offer or the PCCS Offer, and is subject to various factors, including
but not limited to investment objectives of each Accepting Shareholder and
Accepting PCCS Holder respectively. We further highlight that the realizable
value from the Option to Subscribe depends on several factors, such as future
prospects and share price of the Offeror Shares. We have not been furnished or
given access to any non-publicly available information of the Offeror and we
have not conducted any analysis on the share price of the Offeror Shares.
In rendering our advice and giving our opinion, we did not have regard to the general
or specific investment objectives, financial situation, risk profiles, tax position or
particular needs and constraints of any individual Shareholder and PCCS Holder. As
each Shareholder and PCCS Holder would have different investment objectives and
profiles, we would advise the Independent Directors to recommend that any individual
Shareholder and PCCS Holder who may require specific advice in relation to his or her
investment objectives or portfolio should consult his or her stockbroker, bank
manager, solicitor, accountant or other professional advisers immediately.
I-37
10
ASSESSMENT OF THE PCCS OFFER
As set out in paragraph 3 of the Offer Document, in accordance with Note 1(a) on Rule 19
of the Code, the PCCS Offer Price is the “see-through” price, i.e. an amount in cash equal
to the Offer Price multiplied by the number of Offer Shares (rounded down to the nearest
Offer Share) which would have been issued had the PCCS been converted (based on the
aggregate principal amount of the PCCS tendered in acceptance of the PCCS Offer). Each
Accepting PCCS Holder will also be granted a PCCS Option to Subscribe for Offeror
Shares.
In the course of our evaluation of the PCCS Offer, we have given due consideration to, inter
alia, the following factors:
(a)
PCCS Offer Price and Conversion Price;
(b)
historical price and trading analysis of the PCCS;
(c)
other valuation methodologies;
(d)
conditionality of the PCCS Offer;
(e)
no fixed redemption date for the PCCS; and
(f)
step down of the PCCS distribution rate.
In addition, the PCCS Offer is calculated on a “see-through” basis. Please also refer to our
assessment of the financial terms of the Offer in Sections 9.1 to 9.9, assessment on the
Share Option to Subscribe in Section 9.10 and other considerations in relation to the Offer
highlighted in Section 11 of this letter, which are applicable to the PCCS Holders.
10.1 PCCS Offer Price and Conversion Price
In accordance with Note 1(a) on Rule 19 of the Code, the PCCS Offer Price is the
“see-through” price, i.e. an amount in cash equal to the Offer Price multiplied by the number
of Offer Shares (rounded down to the nearest Offer Share) which would have been issued
had the PCCS been converted (based on the aggregate principal amount of the PCCS
tendered in acceptance of the PCCS Offer).
As set out in paragraph 3.3 of the Offer Document, for purely illustrative purposes, based
on the Offer Price of S$0.41, the Subscription Price of S$11.1043 and the PCCS
Conversion Price of S$0.565 and assuming that the Offer becomes or is declared to be
unconditional in all respects in accordance with its terms:
(a)
PCCS, such Accepting PCCS Holder will receive S$776.13 in cash and will be granted
the PCCS OTS to subscribe for up to 69 Offeror Shares at the Subscription Price of
S$11.1043 for each Offeror Share.
(b)
PCCS, such Accepting PCCS Holder will receive S$7,764.58 in cash and will be
granted the PCCS OTS to subscribe for up to 699 Offeror Shares at the Subscription
Price of S$11.1043 for each Offeror Share.
I-38
(c)
PCCS, such Accepting PCCS Holder will receive S$38,822.90 in cash and will be
granted the PCCS OTS to subscribe for up to 3,496 Offeror Shares at the Subscription
Price of S$11.1043 for each Offeror Share.
According to the illustration provided in the Offer Document, in respect of 10,000 PCCS, the
Accepting PCCS Holder will receive S$0.7765 for each of the PCCS validly tendered. The
PCCS Offer Price therefore equates to a discount of 27.4% to the principal amount of
S$1.07 per PCCS. We note that this discount arises from the fact that the PCCS Conversion
Price of S$0.565 per Share is higher than the Offer price of S$0.41 per Share.
Finally, we note that as the PCCS Offer Price is calculated on the basis of a “see-through”
price, the consideration an Accepting PCCS Holder would receive from accepting the PCCS
Offer would be the same as if the Accepting PCCS Holder were to convert the PCCS held
to Shares and accept the Offer Price.
10.2 Historical Price and Trading Analysis of the PCCS
We have compared the PCCS Offer Price to the historical and current price performance of
the PCCS over different observation periods.
We set out in the chart below, the closing price and daily trading volume of the PCCS for
the one-year period prior to and including the Last Trading Day.
PCCS performance for the one-year period prior to and including the Last Trading Day (1), (2)
1.40
80,000
70,000
1.20
Denomination: S$1.07
60,000
PCCS Offer Price for each PCCS
tendered in acceptance of the PCCS
Offer: S$0.7765 in cash(3)
0.80
50,000
40,000
0.60
Volume
PCCS Price (S$)
1.00
30,000
0.40
20,000
0.20
10,000
0.00
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Volume
Apr-15
Apr-15
PCCS Price
May-15
Denomination
Jun-15
Jul-15
Aug-15
Sep-15
0
Oct-15
PCCS Offer Price
Source: Bloomberg L.P. as at the Last Trading Day
Notes:
(1)
Based on data extracted from Bloomberg L.P. which shows prices adjusted to reflect any changes due to
the 2015 Rights Issue.
(2)
The last trading activity of the PCCS prior to the Offer Announcement Date was recorded on 23 October
2015.
(3)
According to the illustration for 10,000 PCCS provided in paragraph 3.3 the Offer Document.
We note that during the one-year period prior to and including the Last Trading Day, the
price of the PCCS decreased by 9.7 per cent., and has been below the PCCS Offer Price
for the same period.
I-39
We set out in the chart below, the closing price and daily trading volume of the PCCS from
the Offer Announcement Date up to and including the Latest Practicable Date.
PCCS performance from the Offer Announcement Date up to and including the Latest
Practicable Date (1)
350,000
1.40
300,000
1.20
Denomination: S$1.07
250,000
PCCS Offer Price for each PCCS
tendered in acceptance of the PCCS
Offer: S$0.7765 in cash(2)
0.80
200,000
0.60
150,000
0.40
100,000
0.20
50,000
0.00
0
Volume
PCCS Price
Denomination
Volume
PCCS Price (S$)
1.00
PCCS Offer Price
Source: Bloomberg L.P. as at the Latest Practicable Date
Notes:
(1)
Based on data extracted from Bloomberg L.P. which shows prices adjusted to reflect any changes due to
the 2015 Rights Issue.
(2)
According to the illustration for 10,000 PCCS provided in paragraph 3.3 the Offer Document.
We note that during the period from the Offer Announcement Date to the Latest Practicable
Date, the price of the PCCS increased by 0.9 per cent., based on closing price of S$0.753
on 9 November 2015 and S$0.760 on 1 December 2015.
The PCCS Offer Price represents the following premia over the historical traded prices of
the PCCS:
Number of PCCS Validly Tendered
Illustrative PCCS Offer Price Per
(1), (2)
PCCS
Price Basis
Price (S$)
1,000
10,000
50,000
S$0.7761
S$0.7765
S$0.7765
PCCS Offer Price %
Premium/(Discount)
Last traded price
0.760
2.1%
2.2%
2.2%
Last traded price prior to the Offer
Announcement Date
Last traded price
as at 23-Oct-2015
0.605
28.3%
28.3%
28.3%
One-week period up to and
Average(3)
Not Traded
NA
NA
NA
One-month period up to and
Average(3)
0.631
23.0%
23.1%
23.1%
Three-month period up to and
Average(3)
0.608
27.6%
27.7%
27.7%
Six-month period up to and
Average(3)
0.641
21.1%
21.1%
21.1%
One-year period up to and
Average(3)
0.641
21.1%
21.1%
21.1%
I-40
Sources: Bloomberg L.P. as at the Latest Practicable Date
Notes:
(1)
According to the illustration provided in the Offer Document.
(2)
Rounded to 4 decimal places to reflect rounding of Shares received from the PCCS Conversion.
(3)
Simple average of daily last traded prices during the relevant periods.
According to the illustration provided in the Offer Document, in respect of 10,000 PCCS,
(i)
The PCCS Offer Price represents a premium of approximately 21.1%, 21.1%, 27.7%
and 23.1% over the average trading price of the PCCS for the one-year, six-month,
three-month and one-month periods prior to and including the Last Trading Day,
respectively;
(ii)
The PCCS Offer Price represents a premium of approximately 28.3% over the last
traded price of the PCCS on the SGX-ST as at 23 October 2015; and
(iii) The PCCS Offer Price represents a premium of approximately 2.2% over the last
traded price of the PCCS on the SGX-ST on the Latest Practicable Date.
We also note that there is no assurance that the price of the PCCS will remain at current
levels. In addition, the past price performance of the PCCS is not indicative of the future
price performance of the PCCS. Following the close of the Offer and PCCS Offer, should
the Shares be delisted, there will be no clear market price for the underlying Shares of the
PCCS.
10.3 Other Valuation Methodologies
We note that, in addition to the “see-through” price methodology prescribed by the Code,
there exists other fundamental valuation methodologies, such as binomial and trinomial
models, through which the PCCS may be priced. The outputs from such models are driven
by a number of input variables, which, depending on the specific assumptions adopted, can
lead to higher or lower prices for the PCCS relative to the “see-through” price methodology.
These variables include, inter alia: the volatility estimation, the credit spread and the
stock-borrow cost. It should be noted that the theoretical value of the PCCS using these
other methodologies may not reflect the actual price of the PCCS to be transacted in the
market, and there can be no assurance that an active trading of the PCCS will ensue or will
trade at close to the theoretical value as suggested by these other methodologies.
10.4 Conditionality of the PCCS Offer
We note that the PCCS Offer is subject to and conditional upon the Offer becoming or being
declared unconditional in all respects in accordance with its terms. If the Offer lapses, the
PCCS Offer shall lapse accordingly. Whilst the PCCS Offer is conditional upon the Offer
becoming or being declared unconditional in all respects in accordance with its terms, the
Offer will not be conditional upon acceptances received in relation to the PCCS Offer. The
Offer and the PCCS Offer are separate and are mutually exclusive. The PCCS Offer does
not form part of the Offer, and vice versa.
I-41
10.5 No Fixed Redemption Date for the PCCS
We note that, the PCCS is a perpetual security in respect of which there is no fixed
redemption date, hence the PCCS does not provide PCCS Holders with the ability to
redeem at the principal amount. Following the close of the PCCS Offer, PCCS Holders who
do not accept the PCCS Offer will continue to be exposed to credit risk of the Company.
10.6 Step Down of the PCCS Distribution Rate
We note that, the ordinary PCCS distribution rate is 2% per annum (“p.a.”) in respect of the
period from (and including) the issue date of the PCCS to (but excluding) the ordinary
PCCS distribution payment date falling five years from the issue date (the “Step Down
Date”); and is 0% p.a. from (and including) the Step Down Date onward. No ordinary PCCS
distribution shall accrue in respect of any period from (and including) the Step Down Date.
11
OTHER CONSIDERATIONS IN RELATION TO THE OFFER AND THE PCCS OFFER
11.1
Listing Status and Suspension of Trading
As stated in the Offer Document, the Offeror intends to make the Company its wholly-owned
subsidiary and does not intend to preserve the listing status of the Company. Accordingly,
the Offeror when entitled, intends to exercise its rights of compulsory acquisition under
Section 215(1) of the Companies Act and does not intend to take steps for any trading
suspension of the Shares by the SGX-ST to be lifted in the event that, inter alia, less than
10% of the Shares (excluding treasury shares) are held in public hands.
Suspension of Trading
Under Rule 1105 of the Listing Manual, upon announcement by the Offeror that
acceptances have been received that bring the holdings of the Shares owned by the Offeror
and parties acting in concert with the Offeror to above 90 per cent. of the total number of
issued Shares (excluding treasury Shares), the SGX-ST may suspend the trading of the
listed securities of the Company on the SGX-ST until such time when the SGX-ST is
satisfied that at least 10 per cent. of the total number of issued Shares (excluding treasury
Shares) are held by at least 500 Shareholders who are members of the public. Under Rule
1303(1) of the Listing Manual, where the Offeror succeeds in garnering acceptances
exceeding 90 per cent. of the total number of issued Shares (excluding treasury Shares),
thus causing the percentage of the total number of issued Shares (excluding treasury
Shares) held in public hands to fall below 10 per cent., the SGX-ST will suspend trading of
the listed securities of the Company at the close of the Offer.
Free Float
Rule 723 of the Listing Manual requires the Company to ensure that at least 10 per cent.
of the total number of issued Shares (excluding treasury Shares) is at all times held by the
public (the “Free Float Requirement”). In addition, under Rule 724 of the Listing Manual,
if the percentage of the total number of issued Shares (excluding treasury Shares) held in
public hands falls below 10 per cent., the Company must, as soon as practicable, announce
that fact and the SGX-ST may suspend trading of all securities of the Company on the
SGX-ST. Rule 724 of the Listing Manual further states that the SGX-ST may allow the
Company a period of three months, or such longer period as the SGX-ST may agree, for the
percentage of the total number of issued Shares (excluding treasury Shares) held by
members of the public to be raised to at least 10 per cent., failing which the Company may
be removed from the Official List of the SGX-ST.
I-42
In the event the Company does not meet the Free Float Requirement, the Offeror does
not intend to preserve the listing status of the Company and does not intend to take
any steps for any trading suspension in the securities of the Company to be lifted.
11.2
Compulsory Acquisition
Pursuant to Section 215(1) of the Companies Act, if the Offeror receives valid acceptances
of the Offer and/or acquires such number of Offer Shares from the Commencement Date
otherwise than through valid acceptances of the Offer in respect of not less than 90 per
cent. of the total number of Shares in issue (excluding treasury Shares) as at the final
Closing Date (other than those already held by the Offeror, its related corporations or their
respective nominees as at the Commencement Date), the Offeror would be entitled to
exercise its right to compulsorily acquire all the Offer Shares of the Shareholders who have
not accepted the Offer (the “Dissenting Shareholders”) on the same terms as those
offered under the Offer.
In such event, the Offeror intends to exercise its right to compulsorily acquire all the
Offer Shares not acquired under the Offer. The Offeror will then proceed to delist the
Company from the SGX-ST.
Dissenting Shareholders have the right under and subject to Section 215(3) of the
Companies Act, to require the Offeror to acquire their Shares in the event that the Offeror,
its related corporations or their respective nominees acquire, pursuant to the Offer, such
number of Shares which, together with the Shares held by the Offeror, its related
corporations or their respective nominees, comprise 90 per cent. or more of the total
number of issued Shares (excluding treasury Shares) as at the final Closing Date.
Dissenting Shareholders who wish to exercise such right are advised to seek their
own independent legal advice. Unlike Section 215(1) of the Companies Act, the 90 per
cent. threshold under Section 215(3) of the Companies Act does not exclude Shares held
by the Offeror, its related corporations or their respective nominees as at the
Commencement Date.
Subject to the relevant provisions of the Companies (Amendment) Act 2014 (the “Relevant
Legislative Amendment”) coming into force, the compulsory acquisition procedure under
Section 215 of the Companies Act will be extended to include “units of shares”, such as the
PCCS. As at the Latest Practicable Date, the Relevant Legislative Amendment has not yet
come into force. Subject to the Relevant Legislative Amendment coming into force, in the
event that the Offeror receives valid acceptances of the PCCS Offer and/or acquires such
number of PCCS from the Commencement Date otherwise than through valid acceptances
of the PCCS Offer in respect of not less than 90 per cent. of the total number of PCCS that
remains outstanding as at the final Closing Date (other than those already held by the
Offeror, its related corporations or their respective nominees as at the Commencement
Date), the Offeror would be entitled to exercise the right to compulsorily acquire all the
PCCS of the PCCS Holders who have not accepted the PCCS Offer (the “Dissenting PCCS
Holders”) on the same terms as those offered under the PCCS Offer.
In such event, the Offeror intends to exercise its right to compulsorily acquire all the
PCCS not acquired under the PCCS Offer.
Further, subject to the Relevant Legislative Amendment coming into force, the Dissenting
PCCS Holders will also have the right under and subject to Section 215(3) of the
Companies Act (as amended by the Relevant Legislative Amendment) to require the Offeror
to acquire their PCCS in the event that the Offeror, its related corporations or their
respective nominees acquire, pursuant to the PCCS Offer, such number of PCCS which,
together with the PCCS held by the Offeror, its related corporations or their respective
I-43
nominees, comprise 90 per cent. or more of the total number of PCCS that remains
outstanding as at the final Closing Date. Dissenting PCCS Holders who wish to exercise
such right (if and when applicable) are advised to seek their own independent legal advice.
11.3
Implications of Delisting for Shareholders
Shareholders should note that shares of unlisted companies are generally valued at a
discount to the shares of comparable listed companies as a result of the lack of
marketability. Following the Proposed Delisting, it is likely to be difficult for Shareholders
who do not accept the Offer to sell their Shares in the absence of a public market for the
Shares as there is no arrangement for Shareholders to exit. If the Company is delisted,
even if such Shareholders were able to sell their Shares, they may receive a lower price as
compared to the Offer Price. Further, any transfer or sale of Shares represented by share
certificates will be subject to stamp duty.
Shareholders should also note that, under the Code, except with the consent of the SIC,
neither the Offeror nor any person acting in concert with it may, within six (6) months of the
closure of the Offer, make a second offer to, or acquire any Shares from, any Shareholder
on terms better than those made available under the Offer.
As an unlisted company, the Company will no longer be obliged to comply with the listing
requirements of the SGX-ST, in particular the continuing corporate disclosure requirements
under Chapter 7 and Appendices 7.1, 7.2, 7.4.1 and 7.4.2 of the Listing Manual.
11.4
Revision
We note that the Offeror reserves its right to revise the terms of the Offer and the PCCS
Offer at such time and in such manner as it may consider appropriate. If the Offer and the
PCCS Offer are revised, the Offer and the PCCS Offer will remain open for acceptances for
at least 14 days from the date of posting of the written notification of the revision to
Shareholders and PCCS Holders. In any case, where the terms are revised, the benefit of
the Offer and the PCCS Offer (as so revised) will be made available to each of the
Shareholders and PCCS Holders who have previously accepted the Offer and the PCCS
Offer respectively.
Shareholders who are in doubt of their position should seek independent
professional advice.
12
CONCLUSION AND RECOMMENDATION
This summary should be read in conjunction with, and in the context of, the full text of this
letter. In arriving at our advice in respect of the Offer, PCCS Offer and Options Proposal, we
have taken into account, inter alia, the following key considerations summarised below:
I-44
12.1 Offer
13
(a)
The closing prices of the Shares have been recorded in a band between S$0.245 and
S$0.365 per Share over the one-year period prior to and including the Last Trading
Day. The Shares have not traded above the Offer Price during the one-year period
prior to and including the Last Trading Day. The Offer Price represents a premium of
12.3% over the highest closing price of S$0.365 per Share and 67.3% premium over
the lowest closing price of S$0.245 per Share recorded in the one-year period prior to
and including the Last Trading Day;
(b)
The Company’s daily closing share prices have been recorded in a band between
S$0.405 and S$0.415 per Share in the period between the Offer Announcement Date
and the Latest Practicable Date. The total volume transacted at S$0.415 per Share
between the Offer Announcement Date and the Latest Practicable Date is
approximately 13.1 million Shares which amounts to approximately 0.5% of the total
number of issued Shares of the Company and approximately 4.6% of the total number
of Shares transacted during the said period;
(c)
Based on our comparison of the Offer Price against the Company’s VWAP over the
various timeframes, the Offer Price represents a premia of approximately 33.1%,
36.7%, 42.4% and 35.3% over the VWAP of the Shares for the one-year, six-month,
three-month and one-month periods prior to and including the Last Trading Day,
respectively. The Offer Price represents a premium of 32.3% over the last traded price
of the Shares on the Last Trading Day;
(d)
In the one-year period up to and including the Last Trading Day and the Latest
Practicable Date, the Company’s average daily trading volume as a percentage of its
free float and average daily trading value as a percentage of its market capitalisation
is above the mean and the median liquidity measure of the top 15 largest companies
by market capitalisation traded on the SGX-ST. In the one-year period up to and
including the Last Trading Day and the Latest Practicable Date, the Company’s
average daily trading volume as a percentage of its free float is above the mean and
the median liquidity measure and the average daily traded value as a percentage of its
market capitalisation is within the range exhibited by the SGX-ST listed companies
with market capitalisation of between S$900 million and S$1,100 million as at the
Latest Practicable Date, excluding the Company. The analysis suggests that the
trading of the Shares does not suffer from illiquid trading conditions and that the
historical market price of the Shares provides a meaningful reference point for
comparison with the Offer Price;
(e)
The premia implied by the total of the Offer Price over the one-month, three-month and
six-month VWAP of the Shares prior to and including the Last Trading Day, are above
the mean and the median premia as implied by the respective offer prices in respect
of the Precedent Privatisations;
(f)
The equivalent LTM 13 EV/EBITDA, LTM 13 AEV/EBITDAR and P/B multiples for the
Company implied by the Offer Price are above the mean and median indicated by the
Comparable Companies set out in this letter. The equivalent LTM 13 EV/Revenue
multiple for the Company implied by the Offer Price is within the range indicated by the
Comparable Companies set out in this letter;
Refers to last twelve months ended 30 September 2015
I-45
(g)
The equivalent LTM 14 EV/EBITDA and P/B multiples for the Company implied by the
Offer Price are above the mean and median indicated by the Precedent Transactions
set out in this letter. The equivalent LTM 14 EV/Revenue multiple for the Company
implied by the Offer Price is within the range indicated by the Precedent Transactions
set out in this letter;
(h)
Offer Price represents a premium of 42.6% to the average Share price target
estimates of S$0.29 by research brokers as at the Last Trading Day, according to
Bloomberg L.P., Thomson Research and research reports available to us. Offer Price
represents a premium of 13.9% to the average Share price target estimates by
research brokers as at the Latest Practicable Date based on broker research price
targets released between the Offer Announcement Date and the Latest Practicable
Date, according to Bloomberg L.P., Thomson Research and research reports available
to us;
(i)
With respect to the Option to Subscribe, it is personal to the Accepting
Shareholder/Accepting PCCS Holder to whom it is granted and shall not be
transferred, charged, assigned, pledged or otherwise disposed of, in whole or in part,
unless with the prior approval of SIA. The Accepting Shareholder/Accepting PCCS
Holder who is granted such option would not be able to monetize the Option to
Subscribe in the open market;
a.
the Option to Subscribe represents an investment decision for the Accepting
Shareholders and Accepting PCCS Holders that is separate from the decision as
to whether to accept the Offer; and
b.
the Offeror Share price as at the Latest Practicable Date is below the
Subscription Price. Investors may not be able to realize value immediately upon
exercise of Option to Subscribe when the prevailing market price of the Offeror
Share is below Subscription Price, as such investors can purchase the Offeror
Shares at a lower price on market.
(j)
As at the Latest Practicable Date, the Offeror holds approximately 55.74% of the total
number of issued Shares and is in a position to exert significant control over the
Company, including passing of ordinary resolutions;
(k)
We note that the Offeror has reserved the right to waive the Acceptance Condition or
reduce such condition to a level equal to or less than 90 per cent. of the voting rights
attributable to all the Shares in issue as at the close of the Offer, subject to the
approval of the SIC;
(l)
We note that the Offeror reserves its right to revise the terms of the Offer and the
PCCS Offer at such time and in such manner as it may consider appropriate. As
informed by the Directors, the Company has not received an enhancement or revision
of the Offer as at the Latest Practicable Date and there is no certainty that such a
revision will be made;
(m) As informed by the Directors, the Company has not received any competing offer and
there is no publicly available evidence of an alternative offer for the Shares from any
third party as at the Latest Practicable Date. In the event of an alternative or competing
offer, we note that unless the Offeror accepts such alternative or competing offer, any
offer made by any third parties would not be capable of becoming unconditional;
14
Refers to last twelve months ended 30 September 2015.
I-46
(n)
If the Offeror succeeds in garnering acceptances such that less than 10% of the total
number of issued Shares remains in the public hands, the SGX-ST will suspend the
trading of the Shares. Those shareholders who did not accept the Offer would be
unable to sell shares on the SGX-ST;
(o)
Discussions with representatives of the Company;
(p)
Review of relevant Company announcement and fillings; and
(q)
Other relevant considerations.
12.2 PCCS Offer
15
(a)
With respect to the PCCS Offer, as the PCCS Offer Price is calculated on the basis of
a “see-through” price, the consideration a PCCS Holder would receive from accepting
the PCCS Offer would be the same as if the PCCS Holder were to convert the PCCS
to Shares in the Company and accept the Offer. Accordingly, our analysis and
conclusion with respect to the Offer Price and the Option to Subscribe will similarly be
relevant to the PCCS Holders;
(b)
The PCCS Offer Price represents a premium of approximately 21.1%, 21.1%, 27.7%
and 23.1% over the average trading price of the PCCS for the one-year, six-month,
three-month and one-month periods prior to and including the Last Trading Day
respectively15;
(c)
traded price of the PCCS on the SGX-ST as at 23 October 2015 15;
(d)
traded price of the PCCS on the SGX-ST on the Latest Practicable Date 15;
(e)
Following the close of the Offer and PCCS Offer, should the Shares be delisted, there
will be no clear market price for the underlying Shares of the PCCS;
(f)
The PCCS is a perpetual security in respect of which there is no fixed redemption date,
hence, the PCCS does not provide PCCS Holders with the ability to redeem at the
principal amount;
(g)
Ordinary PCCS distribution rate is 2% p.a. in respect of the period from (and including)
the issue date of the PCCS to (but excluding) the ordinary PCCS distribution payment
date falling five years from the Step Down Date; and is 0% p.a. from (and including)
the Step Down Date onward. No ordinary PCCS distribution shall accrue in respect of
any period from (and including) the Step Down Date.
According to the illustration provided in the Offer Document, in respect of 10,000 PCCS.
I-47
12.3 Options Proposal
We note that as the Options Price is calculated on a “see-through” basis, the consideration
an Optionholder would receive from accepting the Options Proposal would be the same as
if the Optionholder were to convert the Options and accept the Offer. Accordingly, our
analysis and conclusion with respect to the Offer Price will similarly be relevant to the
Optionholders.
12.4 Recommendation
Having considered the aforesaid points including the various factors as set out in this letter
and information made available to us as at the Latest Practicable Date, we are of the
opinion that the financial terms of the Offer are, on balance, fair and reasonable.
Based on our opinion, we advise the Independent Directors to recommend that
Shareholders accept the Offer, unless Shareholders are able to obtain a price higher
than the Offer Price on the open market, taking into account all brokerage
commissions or transaction costs in connection with open market transactions.
Having also considered these points including the various factors as set out in this letter
and information made available to us as at the Latest Practicable Date, we are of the
opinion that the financial terms of the PCCS Offer are, on balance, fair and
reasonable.
We also note that as the PCCS Offer Price is calculated on a “see-through” basis, the
consideration a PCCS Holder would receive from accepting the PCCS Offer would be the
same as if the PCCS Holder were to convert the PCCS and accept the Offer. Our advice to
Shareholders with respect to the Offer is applicable to PCCS Holders. Accordingly, we
advise the Independent Directors to recommend that PCCS Holders accept the PCCS
Offer or sell their PCCS or Shares, after converting their PCCS, in the open market if
they can obtain a price higher than the Offer Price after taking into account all
brokerage commissions or transaction costs in connection with open market
transactions.
The Accepting Shareholders and the Accepting PCCS Holders will have the flexibility to
decide how they wish to utilise their cash consideration, whether to acquire the Offeror
Shares through the exercise of the Option to Subscribe or through the open market or not
at all. Accepting Shareholders and the Accepting PCCS Holders who wish to remain
invested in the long-term prospects of the SIA Group and share in the future of Tiger
Airways through a stake in SIA can, subject to the Offer becoming or being declared to be
unconditional in all respects in accordance with its terms, exercise the Option to Subscribe.
The decision to exercise the Option to Subscribe represents an investment decision
for the Accepting Shareholders and Accepting PCCS Holders that is separate from
the decision on whether to accept the Offer, and is subject to various factors,
including but not limited to investment objectives of each Accepting Shareholder and
Accepting PCCS Holder.
As each Shareholder and PCCS Holder would have different investment objectives
and profiles, we would advise the Independent Directors to recommend that any
individual Shareholder and PCCS Holder who may require specific advice in relation
to his or her investment objectives or portfolio should consult his or her stockbroker,
bank manager, solicitor, accountant or other professional advisers immediately.
I-48
As the Offer is being extended on the same terms and conditions to all new Shares
unconditionally issued or to be issued pursuant to the valid exercise prior to the close of the
Options Proposal, we recommend that the Independent Directors provide the same advice
to the Optionholders whose exercise price is lower than the Offer Price as is provided to the
Shareholders.
In respect of the Options Proposal, we note that as the Options Price is calculated on a
“see-through” basis, the consideration an Optionholder would receive from accepting the
Options Proposal would be the same as if the Optionholder were to convert the Options and
accept the Offer. Our advice to Shareholders with respect to the Offer is applicable to
Optionholders. Accordingly, we advise the Independent Directors to recommend
Optionholders to accept the Options Proposal or sell their Shares, after exercising
their Options, in the open market if they can obtain a price higher than the Offer Price
after deducting expenses.
We wish to emphasise that we have been appointed to render our opinion on the Latest
Practicable Date. Our terms of reference do not require us to express, and we do not
express, an opinion on the future growth prospects of the Company.
In rendering our advice, we have not considered the specific investment objectives,
financial situation, tax position, tax status, risk profiles or particular needs and constraints
or circumstances of any individual Shareholder, PCCS Holder or Optionholder. As each
Shareholder, PCCS Holder or Optionholder would have different investment objectives and
profiles, we would advise the Independent Directors to recommend that any individual
Shareholder, PCCS Holder or Optionholder who may require specific advice in the context
of his specific investment objectives or portfolio should consult his stockbroker, bank
manager, solicitor, accountant, tax adviser, or other professional adviser immediately.
The Independent Directors should note that trading of the Shares is subject to, inter alia, the
performance and prospects of the Company, prevailing market conditions, economic
outlook and stock market conditions and sentiments. Accordingly, our opinion does not and
cannot take into account future trading activities, patterns, developments or price levels
that may be established beyond the Latest Practicable Date.
The Independent Directors should advise the Shareholders, the PCCS Holders and the
Optionholders that the opinion and advice of MKES should not be relied upon by any
Shareholder, PCCS Holder or Optionholder as the sole basis for deciding whether or not to
accept the respective Offer, PCCS Offer and Options Proposal.
This letter is addressed to the Independent Directors solely for their benefit, in connection
with and for the purpose of their consideration of the Offer. Any recommendation to the
Shareholders, the PCCS Holders and the Optionholders remains the sole responsibility of
the Independent Directors.
This letter is governed by, and construed in accordance with, the laws of Singapore, and is
strictly limited to the matters stated herein and there is no implication with regard to any
other matter. Nothing herein shall confer or be deemed or is intended to confer any right of
benefit to any third party and the Contracts (Rights of Third Parties) Act, Chapter 53B of
Singapore and any re-enactment thereof shall not apply.
Yours faithfully
Maybank Kim Eng Securities Pte. Ltd.
I-49
APPENDIX II
ADDITIONAL GENERAL INFORMATION
1.
DIRECTORS
The names, addresses and designations of the Directors as at the Latest Practicable Date
are set out below:
Name
Address
Designation
Mr Hsieh Fu Hua
Central 1
#04-06/09
Honeywell Building
Singapore 486073
Chairman and Independent
Director
Ms Chong Phit Lian
Central 1
#04-06/09
Honeywell Building
Singapore 486073
Non-Executive Director
(Non-Independent)
Mr Lang Tao Yih, Arthur
Central 1
#04-06/09
Honeywell Building
Singapore 486073
Independent Director
Mr Lee Chong Kwee
Central 1
#04-06/09
Honeywell Building
Singapore 486073
(Non-Independent)
Mr Lee Lik Hsin
Central 1
#04-06/09
Honeywell Building
Singapore 486073
Executive Director and
Chief Executive Officer
Mr Ng Chin Hwee
Central 1
#04-06/09
Honeywell Building
Singapore 486073
(Non-Independent)
Mr Sirisena Mervyn s/o
Piankara Mestrige
Central 1
#04-06/09
Honeywell Building
Singapore 486073
(Non-Independent)
II-1
2.
Name
Address
Designation
Mr Yap Chee Keong
Central 1
#04-06/09
Honeywell Building
Singapore 486073
Independent Director
Mr Yeap Beng Hock Gerard
Central 1
#04-06/09
Honeywell Building
Singapore 486073
(Non-Independent)
DESCRIPTION OF THE COMPANY
The Company is a limited liability company incorporated in the Republic of Singapore on 1
February 2007 and listed on the Main Board of the SGX-ST on 22 January 2010. The
Company is a subsidiary of SIA, which is in turn a subsidiary of Temasek Holdings (Private)
Limited, both incorporated in the Republic of Singapore.
The principal activities of the Company consist of airline and aircraft management.
3.
SHARE CAPITAL
3.1
Issued Share Capital
The issued and paid-up share capital of the Company as at the Latest Practicable Date is
S$917,051,490 comprising 2,500,082,980 issued Shares.
3.2
Capital, Dividends and Voting Rights
The rights of Shareholders in respect of capital, dividends and voting are contained in the
Articles. An extraction of the relevant provisions in the Articles relating to the rights of
Shareholders in respect of capital, dividends and voting has been reproduced in Appendix
III to this Circular. The Articles are available for inspection at the registered address of the
Registrar at 50 Raffles Place, #32-01, Singapore Land Tower, Singapore 048623.
Capitalised terms and expressions not defined in the extracts have the meanings ascribed
to them in the Articles and/or the Companies Act.
3.3
Number of Shares Issued since the End of the Last Financial Year
As at the Latest Practicable Date, 3,447,539 new Shares have been issued since the end
of FY2015, being the last financial year of the Company. Details of the issues of such new
Shares are set out below:
Number of
Shares
Share Capital
S$’000
Balance at 1 April 2015
Shares vested under the CEO Restricted Share Grant
Shares vested under the Tiger Airways RSP
Shares issued upon conversion of the PCCS
2,496,635,441
864,871
1,126,333
1,456,335
915,523
273
438
817
Balance as at the Latest Practicable Date
2,500,082,980
917,051
II-2
3.4
Options and Convertible Instruments
Save as disclosed below, as at the Latest Practicable Date, there are no other outstanding
instruments convertible into, rights to subscribe for, and options in respect of, the Shares:
(a)
Outstanding PCCS
As at the Latest Practicable Date, the Company has outstanding an aggregate of
approximately S$14,284,597.37 in principal amount of 13,350,091 PCCS. The
denomination for each PCCS is S$1.07 and the outstanding PCCS are convertible into
25,282,473 new Shares at the prevailing conversion price of S$0.565 per Share.
(b)
Outstanding Options under the Tiger Airways Scheme
As at the Latest Practicable Date, there are 10,865 outstanding Options to subscribe
for an aggregate of 10,865 Shares granted under the Tiger Airways Scheme.
(c)
Outstanding Awards under the Tiger Airways Share Plans
As at the Latest Practicable Date, there are outstanding Awards granted under the
Tiger Airways Share Plans pursuant to which up to an aggregate of 18,994,795 Shares
may be vested and released (subject to the fulfilment of the terms of the Awards and
the achievement of pre-determined performance targets) as further set out below:
Date of Award
Tiger Airways RSP
30 October 2013
11 February 2014
13 August 2014
13 August 2015
Tiger Airways PSP
30 October 2013
11 February 2014
30 March 2015
13 August 2015
Balance as
at 1 April
2015
Awards
Granted
959,371
49,382
2,147,479
–
–
–
–
3,364,900
(446,519)
(24,630)
(655,184)
–
(78,281)
–
(238,501)
–
434,571
24,752
1,253,794
3,364,900
3,156,232
3,364,900
(1,126,333)
(316,782)
5,078,017
2,993,214
246,549
3,920,515
–
–
–
–
6,756,500
–
–
–
–
–
–
–
–
2,993,214
246,549
3,920,515
6,756,500
7,160,278
6,756,500
–
–
13,916,778
4.
DISCLOSURE OF INTERESTS
4.1
Interests of the Company in Offeror Securities
Vested
Awards
Cancelled
Awards
Outstanding
Awards
The Company does not have any direct or deemed interests in any Offeror Securities as at
the Latest Practicable Date.
4.2
Dealings in Offeror Securities by the Company
The Company has not dealt for value in any Offeror Securities during the period
commencing six (6) months prior to the Offer Announcement Date and ending on the Latest
Practicable Date.
II-3
4.3
Interests of the Directors in Offeror Securities
Save as disclosed below, none of the Directors has any direct or indirect interests in any
Offeror Securities as at the Latest Practicable Date:
(a)
Offeror Shares
Direct Interest
Name
Mr Lang Tao Yih, Arthur
Mr Lee Lik Hsin
Mr Ng Chin Hwee
Mr Sirisena Mervyn s/o
Piankara Mestrige
No. of
Offeror
Shares
% (1)
6,000
5,253
237,009
n.m. (2)
n.m. (2)
0.02
27,234
184,839
n.m. (2)
0.02
Deemed Interest
No. of
Offeror
Shares
% (1)
–
–
–
–
–
–
263,996 (3)
2,000 (4)
0.02
n.m. (2)
Notes:
(b)
(1)
Based on the latest information available to the Company, the total number of issued shares of SIA
is 1,163,342,903 (excluding treasury Offeror Shares and one non-tradeable special share) as at the
Latest Practicable Date.
(2)
“n.m.” means not meaningful.
(3)
Mr Sirisena Mervyn s/o Piankara Mestrige is deemed to be interested in the 263,996 Offeror Shares
held in a nominee account.
(4)
Mr Yeap Beng Hock Gerard is deemed to be interested in the 2,000 Offeror Shares held by his
spouse.
Offeror Options
No. of Offeror
Options
6,888 (1)
Mr Lee Lik Hsin
14,000 (2)
Notes:
(1)
(2)
Of the 6,888 Offeror Options held by Mr Lee Lik Hsin:
(i)
1,188 Offeror Options may be exercised into 1,188 Offeror Shares at the exercise price of
S$9.34 per Offeror Share. These Offeror Options are due to expire on 2 July 2016.
(ii)
5,700 Offeror Options may be exercised into 5,700 Offeror Shares at the exercise price of
S$15.46 per Offeror Share. These Offeror Options are due to expire on 1 July 2017.
The 14,000 Offeror Options held by Mr Yeap Beng Hock Gerard may be exercised into 14,000 Offeror
Shares at the exercise price of S$9.34 per Offeror Share. These Offeror Options are due to expire on
2 July 2016.
II-4
(c)
Offeror Awards
No. of Offeror
Awards
Conditional Awards under the SIA RSP (1)
Mr Lee Lik Hsin
– Base Awards
19,983
– Final Awards (Pending Release)
4,871
Mr Ng Chin Hwee
– Base Awards
60,744
14,561
– Base Awards
19,983
– Base Awards
27,638
7,489
Conditional Awards under the SIA PSP
(2)
Mr Lee Lik Hsin
– Base Awards
24,594
Mr Ng Chin Hwee
– Base Awards
100,636
– Base Awards
24,594
– Base Awards
29,276
Awards of Time-based Restricted Shares
– Base Awards
5,426
Conditional Awards of Deferred Shares (3)
Mr Lee Lik Hsin
– Base Awards
15,722
Mr Ng Chin Hwee
– Base Awards
35,728
– Base Awards
21,582
– Base Awards
21,772
Notes:
(1)
The actual number of final awards of fully paid ordinary shares will range from 0% to 150% of the base
awards and is contingent on the achievements against targets over the two-year performance periods
relating to the relevant awards.
II-5
4.4
(2)
The actual number of final awards of fully paid ordinary shares will range from 0% to 200% of the base
awards and is contingent on the achievements against targets over the three-year performance
periods relating to the relevant awards.
(3)
The awards of fully paid ordinary shares will vest at the end of three (3) years from the date of the
grant of the award. At the end of the vesting period, an additional final award will be vested equal to
the base award multiplied by the accumulated dividend yield (based on the sum of SIA share dividend
yields declared with ex-dividend dates occurring during the vesting period).
Dealings in Offeror Securities by the Directors
Save as disclosed below, none of the Directors has dealt for value in any Offeror Securities
during the period commencing six (6) months prior to the Offer Announcement Date and
ending on the Latest Practicable Date:
4.5
(a)
Mr Yeap Beng Hock Gerard had on 4 June 2015 exercised 16,150 Offeror Options into
16,150 Offeror Shares at an exercise price of S$8.02 per share; and
(b)
Mr Sirisena Mervyn s/o Piankara Mestrige had on 22 July 2015 entered into a covered
call option agreement with DBS Bank (Singapore) Global Financial Markets in respect
of 30,000 Offeror Shares of a contract value of S$351,900. The call option expired on
24 August 2015 with the option not being exercised because the conditions were not
met.
Interests of the Directors in Company Securities and Awards
Save as disclosed below, none of the Directors has any direct or deemed interests in any
Company Securities and Awards as at the Latest Practicable Date:
(a)
Shares
Name
Direct Interest
No. of
Shares
% (1)
Deemed Interest
No. of
Shares
% (1)
Mr Hsieh Fu Hua
Mr Lee Lik Hsin
Mr Ng Chin Hwee
–
864,871
100,000
666,000 (2)
–
–
–
0.03
n.m. (3)
0.03
–
–
Notes:
(b)
(1)
Based on the total number of issued Shares being 2,500,082,980 as at the Latest Practicable Date.
(2)
The Shares are held directly by Binjai Inc. Mr Hsieh Fu Hua is the settlor and one of the beneficiaries
of a trust which owns 100% of Binjai Inc, an underlying investment company.
(3)
“n.m.” means not meaningful.
Awards under the Tiger Airways Share Plans
No. of Awards
Conditional Award under the Tiger Airways PSP (1)
Mr Lee Lik Hsin
3,876,917
Note:
(1)
Depending on the achievement of pre-determined performance targets over a specified performance
period, the final number of performance shares to be released can range from 0% to 200% of the
number stated.
II-6
4.6
Dealings in Company Securities by the Directors
None of the Directors has dealt for value in any Company Securities during the period
commencing six (6) months prior to the Offer Announcement Date and ending on the Latest
Practicable Date.
4.7
Offeror Securities owned or controlled by MKES
As at the Latest Practicable Date, none of MKES, or any of the other entities of the Maybank
Group with established offices in Singapore, owns or controls any Offeror Securities.
4.8
Dealings in Offeror Securities by MKES
Save for the following transactions made by MKES, during the period commencing six (6)
months prior to the Offer Announcement Date and ending on the Latest Practicable Date,
none of MKES, or any of the other entities of the Maybank Group with established offices
in Singapore, has dealt for value in the Offeror Securities.
Date
No. of Offeror
Shares Bought
No. of Offeror
Shares Sold
Transaction Price per
Offeror Share (S$)
09 Oct 2015
–
1,000
10.71
09 Oct 2015
1,000
–
10.79
07 Oct 2015
1,000
–
10.64
07 Oct 2015
–
1,000
10.70
02 Oct 2015
1,000
–
10.69
02 Oct 2015
–
1,000
10.78
29 Sep 2015
2,000
–
10.60
29 Sep 2015
–
2,000
10.64
28 Sep 2015
1,000
–
10.60
28 Sep 2015
–
1,000
10.72
28 Aug 2015
–
1,000
10.12
28 Aug 2015
1,000
–
10.21
18 Aug 2015
–
1,000
10.09
18 Aug 2015
1,000
–
10.09
04 Aug 2015
2,000
–
10.32
04 Aug 2015
–
2,000
10.28
06 Jul 2015
–
1,000
11.07
06 Jul 2015
1,000
–
11.04
03 Jul 2015
–
400
11.04
03 Jul 2015
400
–
11.09
02 Jul 2015
–
1,000
10.90
02 Jul 2015
1,000
–
10.93
30 Jun 2015
–
2,000
10.57
30 Jun 2015
2,000
–
10.60
24 Jun 2015
–
1,500
10.60
II-7
Date
4.9
No. of Offeror
Shares Bought
No. of Offeror
Shares Sold
Offeror Share (S$)
24 Jun 2015
1,500
–
10.66
22 Jun 2015
1,000
–
10.48
22 Jun 2015
–
1,000
10.54
11 Jun 2015
1,000
–
10.55
11 Jun 2015
–
1,000
10.57
04 Jun 2015
1,000
–
10.90
04 Jun 2015
–
1,000
10.91
29 May 2015
–
1,000
11.39
29 May 2015
1,000
–
11.34
28 May 2015
1,000
–
11.40
28 May 2015
–
1,000
11.37
22 May 2015
2,300
–
11.64
22 May 2015
–
2,300
11.59
21 May 2015
2,000
–
11.58
21 May 2015
–
2,000
11.61
19 May 2015
3,000
–
11.65
19 May 2015
–
3,000
11.64
14 May 2015
–
2,000
11.63
14 May 2015
2,000
–
11.67
11 May 2015
–
200
11.85
11 May 2015
200
–
11.89
08 May 2015
–
1,000
11.83
08 May 2015
1,000
–
11.75
07 May 2015
–
1,200
11.81
07 May 2015
1,200
–
11.80
Company Securities owned or controlled by MKES
As at the Latest Practicable Date, none of MKES, or any of the other entities of the Maybank
Group with established offices in Singapore, owns or controls any Company Securities.
II-8
4.10 Dealings in Company Securities by MKES
Save for the following transactions made by MKES, during the period commencing six (6)
months prior to the Offer Announcement Date and ending on the Latest Practicable Date,
none of MKES, or any of the other entities of the Maybank Group with established offices
in Singapore, has dealt for value in the Company Securities.
Date
No. of Shares
Bought
No. of Shares
Sold
Share (S$)
09 Nov 2015
100
–
0.41000
09 Nov 2015
–
100
0.41000
05 Nov 2015
–
125,100
0.29001
05 Nov 2015
100
–
0.29500
05 Nov 2015
–
135,800
0.29074
05 Nov 2015
85,800
–
0.29232
05 Nov 2015
–
330,000
0.29227
05 Nov 2015
180,000
–
0.29498
04 Nov 2015
404,000
–
0.29376
04 Nov 2015
–
279,000
0.29500
04 Nov 2015
–
304,700
0.29467
04 Nov 2015
354,700
–
0.29501
04 Nov 2015
311,100
–
0.29500
04 Nov 2015
–
161,100
0.29500
03 Nov 2015
9,500
–
0.29000
03 Nov 2015
–
9,500
0.29000
26 Oct 2015
200,100
–
0.30500
26 Oct 2015
–
200,100
0.30500
23 Oct 2015
200,000
–
0.30500
23 Oct 2015
–
200,000
0.30500
23 Oct 2015
82,000
–
0.30500
23 Oct 2015
–
82,000
0.30500
19 Oct 2015
150,000
–
0.31000
19 Oct 2015
–
150,000
0.31000
14 Oct 2015
–
300
0.30000
14 Oct 2015
–
100,000
0.30500
13 Oct 2015
–
83,000
0.31000
13 Oct 2015
200,000
–
0.30750
13 Oct 2015
–
200,000
0.31000
12 Oct 2015
–
117,900
0.30642
12 Oct 2015
100,100
–
0.31000
12 Oct 2015
113,500
–
0.30706
12 Oct 2015
–
113,500
0.31000
II-9
Date
No. of Shares
Bought
No. of Shares
Sold
Share (S$)
12 Oct 2015
200,000
–
0.30750
12 Oct 2015
–
100,000
0.31500
12 Oct 2015
–
3,050,500
0.31126
12 Oct 2015
3,050,500
–
0.31167
09 Oct 2015
201,100
–
0.30503
09 Oct 2015
–
100,000
0.31000
09 Oct 2015
372,000
–
0.30500
09 Oct 2015
–
698,800
0.30500
08 Oct 2015
–
404,800
0.30641
08 Oct 2015
54,500
–
0.31000
08 Oct 2015
170,000
–
0.30412
08 Oct 2015
–
470,000
0.30486
08 Oct 2015
270,100
–
0.30260
08 Oct 2015
–
340,000
0.30603
07 Oct 2015
500,300
–
0.30500
07 Oct 2015
–
150,000
0.30500
07 Oct 2015
500,000
–
0.30500
07 Oct 2015
–
200,000
0.30500
07 Oct 2015
496,700
–
0.30500
07 Oct 2015
–
100,000
0.30500
06 Oct 2015
–
123,700
0.30485
06 Oct 2015
123,700
–
0.30500
05 Oct 2015
29,800
–
0.30000
05 Oct 2015
–
29,800
0.30000
01 Oct 2015
–
140,000
0.30000
01 Oct 2015
–
176,900
0.30000
30 Sep 2015
–
30,100
0.29998
30 Sep 2015
170,100
–
0.29500
30 Sep 2015
176,900
–
0.29500
25 Sep 2015
–
50,000
0.30000
25 Sep 2015
–
50,000
0.30000
25 Sep 2015
50,000
–
0.30000
23 Sep 2015
–
50,000
0.29500
23 Sep 2015
100,000
–
0.29500
22 Sep 2015
–
290,000
0.28000
22 Sep 2015
290,000
–
0.28000
22 Sep 2015
200,000
–
0.28000
22 Sep 2015
–
200,000
0.28000
II-10
Date
No. of Shares
Bought
No. of Shares
Sold
Share (S$)
22 Sep 2015
–
187,200
0.28000
22 Sep 2015
187,200
–
0.28000
21 Sep 2015
–
29,300
0.27500
21 Sep 2015
29,300
–
0.27500
16 Sep 2015
–
30,200
0.28000
16 Sep 2015
30,200
–
0.28000
16 Sep 2015
100
–
0.28500
16 Sep 2015
–
100
0.28000
31 Aug 2015
–
263,500
0.26500
31 Aug 2015
263,500
–
0.26500
28 Aug 2015
–
58,400
0.27786
28 Aug 2015
–
60,000
0.28000
28 Aug 2015
–
50,000
0.27500
27 Aug 2015
318,400
–
0.26844
27 Aug 2015
–
260,000
0.27115
27 Aug 2015
227,200
–
0.27021
27 Aug 2015
–
167,200
0.27500
27 Aug 2015
222,300
–
0.27017
27 Aug 2015
–
172,300
0.27500
19 Aug 2015
–
100,000
0.27500
19 Aug 2015
100,000
–
0.27500
13 Aug 2015
–
266,900
0.29000
13 Aug 2015
266,900
–
0.28626
12 Aug 2015
100,100
–
0.29000
12 Aug 2015
–
100,100
0.29000
12 Aug 2015
100
–
0.29000
12 Aug 2015
–
100
0.28500
28 Jul 2015
–
217,400
0.30006
28 Jul 2015
217,400
–
0.30155
27 Jul 2015
–
228,400
0.31500
27 Jul 2015
228,400
–
0.31500
21 Jul 2015
175,200
–
0.33000
21 Jul 2015
–
175,200
0.33000
20 Jul 2015
100
–
0.34000
20 Jul 2015
–
100
0.33500
15 Jul 2015
–
100,100
0.31500
15 Jul 2015
–
900
0.31500
15 Jul 2015
900
–
0.31000
II-11
No. of Shares
Bought
Date
4.11
No. of Shares
Sold
Share (S$)
15 Jul 2015
–
100,500
0.31000
15 Jul 2015
2,190,600
–
0.32510
15 Jul 2015
–
2,190,600
0.32500
14 Jul 2015
100,100
–
0.30500
14 Jul 2015
100,500
–
0.30500
07 Jul 2015
–
100,000
0.30500
07 Jul 2015
100,000
–
0.30500
07 Jul 2015
–
100
0.30500
07 Jul 2015
100
–
0.30500
05 Jun 2015
–
100
0.30500
05 Jun 2015
100
–
0.30500
Intentions of the Directors in respect of their Shares
As at the Latest Practicable Date, the Directors who hold Shares have indicated their
intention in respect of accepting or rejecting the Offer in respect of their Shares as follows:
5.
(a)
Mr Hsieh Fu Hua has informed the Company that he intends to tender all the Shares
held by him in acceptance of the Offer.
(b)
Mr Lee Lik Hsin has informed the Company that he intends to tender all the Shares
(c)
Mr Ng Chin Hwee has informed the Company that he intends to tender all the Shares
OTHER DISCLOSURES
5.1 Directors’ Service Contracts
As at the Latest Practicable Date:
(a)
there are no service contracts between any of the Directors or proposed directors with
the Company or any of its subsidiaries which have more than 12 months to run and
which are not terminable by the employing company within the next 12 months without
paying any compensation; and
(b)
there are no such contracts entered into or amended during the period commencing
six (6) months prior to the Offer Announcement Date and ending on the Latest
Practicable Date.
II-12
5.2 Arrangements affecting Directors
As at the Latest Practicable Date:
6.
(a)
it is not proposed that any payment or other benefit shall be made or given to any
Director or director of any other corporation which is by virtue of Section 6 of the
Companies Act deemed to be related to the Company, as compensation for loss of
office or otherwise in connection with the Offer;
(b)
there are no agreements or arrangements made between any Director and any other
person in connection with or conditional upon the outcome of the Offer; and
(c)
none of the Directors has a material personal interest, whether direct or indirect, in any
material contract entered into by the Offeror.
MATERIAL CONTRACTS WITH INTERESTED PERSONS
As at the Latest Practicable Date, save as disclosed in publicly available information on the
Tiger Airways Group, neither the Company nor any of its subsidiaries has entered into
material contracts with persons who are Interested Persons (other than those entered into
in the ordinary course of business) during the period beginning three (3) years before the
Offer Announcement Date.
7.
MATERIAL LITIGATION
As at the Latest Practicable Date, save as disclosed in publicly available information on the
Tiger Airways Group, the Directors are not aware of any material litigation, claims or
proceedings pending or threatened against, or made by, the Company or any of its
subsidiaries or any facts likely to give rise to any such material litigation, claims or
proceedings, which might materially and adversely affect the financial position of the
Company and any of its subsidiaries, taken as a whole.
8.
FINANCIAL INFORMATION
8.1
Consolidated Income Statements
Certain financial information extracted from the audited consolidated income statements of
the Tiger Airways Group for the last three (3) financial years (FY2015, FY2014 and FY2013)
and the unaudited consolidated income statement of the Tiger Airways Group for the half
year ended 30 September 2015 is summarised below. The summary set out below should
be read together with the annual reports, the audited consolidated income statements of the
Tiger Airways Group for the relevant financial periods, the Company’s announcement on the
unaudited consolidated financial statements of the Tiger Airways Group for the half year
ended 30 September 2015 and their respective accompanying notes.
II-13
Group
Unaudited Half
Year ended
30 September
2015
Audited
FY2015
Audited
FY2014
Audited
FY2013
S$’000
S$’000
S$’000
(restated)*
S$’000
(restated)*
Revenue
Passenger seat revenue
Ancillary and other revenue
Lease rental income
255,242
71,879
9,070
525,523
147,448
4,472
560,611
185,044
799
686,029
196,975
–
Total revenue
336,191
677,443
746,454
883,004
(95,743)
(24,521)
(40,018)
(43,032)
(42,396)
(264,725)
(27,833)
(84,246)
(68,526)
(87,715)
(341,115)
2,630
(101,511)
(63,909)
(99,734)
(367,382)
3,638
(123,877)
(74,718)
(89,160)
(48,343)
(7,896)
(75,814)
(20,822)
(77,805)
(27,942)
(86,079)
(36,409)
(13,160)
(23,959)
(30,503)
(34,920)
(20,640)
(1,748)
(8,586)
(36,912)
(9,087)
(17,671)
(34,099)
(3,473)
(21,028)
(34,044)
(4,135)
(28,625)
(346,083)
(717,310)
(798,489)
(875,711)
Operating (loss)/profit
(9,892)
(39,867)
(52,035)
7,293
Finance income
Finance expense
True-up of maintenance cost
Gain/(loss) on disposal of
aircraft
Share of loss of associates
and joint venture
Shutdown costs of PT
Mandala Airlines
Loss on disposal of
associate and joint
venture
Provision for onerous
aircraft leases
Loss on planned disposal of
aircraft
758
(5,184)
–
2,037
(7,654)
(10,750)
6,268
(10,863)
–
2,681
(9,543)
–
–
1,167
1,619
–
(35,328)
(95,058)
–
(11,810)
–
(44,311)
(28,900)
–
–
(108,597)
(25,044)
–
–
(17,453)
Expenses
Fuel costs:
Actual fuel costs
Fuel hedging (loss)/gain
Staff costs
Aircraft rentals
Airport and handling
Maintenance, material and
repair
Route charges
Marketing and distribution
costs
Depreciation and
amortisation
Exchange loss
Others
Total expenses
II-14
–
–
(885)
(27,472)
–
–
Group
Gain on loss of control of
subsidiary
Impairment of associates
Unaudited Half
Year ended
30 September
2015
Audited
FY2015
Audited
FY2014
Audited
FY2013
S$’000
S$’000
S$’000
(restated)*
S$’000
(restated)*
–
–
–
–
106,078
(133,626)
–
(7,100)
(4,426)
(232,699)
(179,526)
(42,319)
Loss before taxation
Taxation
(14,318)
(122)
(272,566)
8,333
(231,561)
8,570
(35,026)
(10,369)
Loss for the period
(14,440)
(264,233)
(222,991)
(45,395)
(0.58)
(0.58)
(17.71)
(17.71)
(20.07)
(20.07)
(4.69)
(4.69)
Loss per share (cents)
Basic
Diluted
Note:
*
8.2
Please refer to Section 8.4(a)(i) of this Appendix II for details of the restatement.
Consolidated Statements of Financial Position
The audited consolidated statements of financial position of the Tiger Airways Group for the
last two (2) financial years (ended 31 March 2015 and 2014) and the unaudited
consolidated statement of financial position of the Tiger Airways Group as at 30 September
2015 are summarised below. The summary set out below should be read together with the
annual reports and the audited consolidated statements of financial position of the Tiger
Airways Group for the relevant financial periods, the Company’s announcement on the
unaudited consolidated financial statements of the Tiger Airways Group as at 30 September
2015 and their respective accompanying notes.
Group
Unaudited
As at
30 September
2015
Audited
As at
31 March
2015
S$’000
S$’000
Audited
As at
31 March
2014
S$’000
(restated)*
ASSETS
Non-current assets
Property, plant and equipment
435,074
Intangible assets
453,517
569,532
126
138
226
8,304
8,304
–
Deferred tax assets
17,183
17,183
2,260
Prepayments
38,706
34,021
33,473
–
–
33,090
Long-term investment
Loans to associate and joint
venture
II-15
Group
Unaudited
As at
30 September
2015
Audited
As at
31 March
2015
Audited
As at
31 March
2014
S$’000
S$’000
S$’000
(restated)*
Other receivables
64,622
65,955
37,825
564,015
579,118
676,406
9,244
7,640
10,018
680
–
–
Amounts due from associate and
joint venture
–
–
3,096
Loans to associate and joint
venture
–
–
8,496
Amounts due from related
companies
13,855
20,763
–
Trade receivables
11,241
11,336
4,928
Other receivables
16,517
18,894
110,461
4,064
3,510
805
287,934
310,175
171,581
343,535
372,318
309,385
72,815
70,959
–
980,365
1,022,395
985,791
916,234
915,523
484,475
15,002
15,002
218,087
(708,032)
(693,441)
(426,866)
Other reserves
(13,963)
(21,687)
Total equity
209,241
215,397
278,690
223,191
225,668
57,500
9,232
11,075
13,353
Current assets
Prepayments
Amounts due from immediate
holding company
Derivative financial instruments
Cash and cash equivalents
Assets related to planned disposal
of aircraft
Total assets
EQUITY AND LIABILITIES
Equity
Share capital
Perpetual convertible capital
securities
Accumulated losses
2,994
Non-current liabilities
Provisions
Deferred income
Deferred tax liabilities
Loans
6,806
6,893
5,474
207,886
223,246
306,976
9,659
–
–
456,774
466,882
383,303
Other long-term liabilities
II-16
Group
Unaudited
As at
30 September
2015
Audited
As at
31 March
2015
Audited
As at
31 March
2014
S$’000
S$’000
S$’000
(restated)*
Current liabilities
Provisions
15,961
17,822
36,931
2,400
2,324
2,618
72,051
67,552
70,881
104
129
83
80,605
83,731
53,081
360
68
–
Deferred income
Sales in advance of carriage
Provision for taxation
Loans
Amounts due to immediate holding
company
Amounts due to related companies
16,249
21,757
–
Trade payables
94,760
105,658
129,222
Other payables
7,836
9,963
29,185
24,024
31,112
1,797
314,350
340,116
323,798
Total liabilities
771,124
806,998
707,101
Total equity and liabilities
980,365
1,022,395
985,791
Derivative financial instruments
Note:
*
8.3
Please refer to Section 8.4(a)(ii) of this Appendix II for details of the restatement.
Significant Accounting Policies
A summary of the significant accounting policies of the Tiger Airways Group is set out in
Note 2 to the audited consolidated financial statements of the Tiger Airways Group for
FY2015, copies of which are available for inspection at the registered address of the
Registrar at 50 Raffles Place, #32-01, Singapore Land Tower, Singapore 048623 during
normal office hours for the period during which the Offer and the PCCS Offer remains open
for acceptance.
Note 7 to the unaudited consolidated financial statements of the Tiger Airways Group for the
half year ended 30 September 2015 as announced by the Company sets out changes in
accounting policies of the Tiger Airways Group beginning on or after 1 April 2015, and is
extracted below:
“7.
ACCOUNTING POLICIES
7a. The Group has adopted the new and revised Singapore Financial Reporting Standards
(“FRS”) and Interpretations of FRS (“INT FRS”) that are effective for annual periods
beginning on or after 1 April 2015. The adoption of these standards and interpretations
did not have any effect on the financial performance or position of the Group.
II-17
7b. Save for those mentioned in note 7a, the Group has applied the same accounting
policies and methods of computation in the financial statements for the current
financial period compared with those of the audited financial statements as at 31
March 2015.”
8.4
Other Changes to the Financial Statements and Accounting Estimates
A summary of the (i) restatement of consolidated income statement and statements of
financial position, (ii) changes in accounting estimates, (iii) maintenance, material and
repair, and (iv) aircraft and engine leasing arrangements of the Tiger Airways Group for
FY2015 and FY2016 is set out below.
(a)
Restatement of Consolidated Income Statement and Statements of Financial Position
(i)
Consolidated Income Statement
In the quarter ended 31 March 2015, the Group reassessed the ancillary revenue
items and noted that it is acting as a principal for income related to (a) call centre
and (b) merchant acquiring fee, which would require these ancillary revenue
items to be reported on a gross basis. As a result, the Group restated the prior
year comparatives to be consistent with the current year presentation. This
accounting treatment is in compliance with FRS 18 Revenue.
The effect of this restatement resulted in a change in presentation and had no
effect on pre-tax loss, net loss or any earning per share amounts for any period
presented.
Please refer to Note 1(c) to the unaudited consolidated financial statements of
the Tiger Airways Group for the half year ended 30 September 2015 as
announced by the Company and Note 2.31 to the audited consolidated financial
statements of the Tiger Airways Group for FY2015 for further details.
(ii)
Consolidated Statements of Financial Position
Due to the return of aircraft from associates, the Group re-assessed in FY2015
the presentation of maintenance reserve payments in the Consolidated
Statements of Financial Position.
As the lessors are not the parties performing the maintenance events, the Group
noted that it should present the gross amount paid by the Group to lessors as
maintenance reserve receivables, and establish a corresponding provision for
return costs under liabilities. The Group restated the prior year comparatives to
be consistent with the current year presentation. This accounting treatment is in
compliance with FRS 1 Presentation of Financial Statements.
As a result of the restatement, the other receivables and provisions were higher
by S$48.7m as at 31 March 2015 and S$27.9m as at 31 March 2014.
The change in presentation had no effect on net asset or equity for any period
presented.
Please refer to Note 2.31 to the audited consolidated financial statements of the
Tiger Airways Group for FY2015 for further details.
II-18
(b)
Changes in Accounting Estimates
(i)
Useful Life of Aircraft and Corresponding Estimate of Aircraft Residual Value
The Group carries out annual reviews of useful life and the residual values of the
assets. Upon completion of the annual review exercise during FY2015, the Group
decided to revise the useful life and residual value of its owned aircraft effective
1 January 2015. Details are shown as follows:
Useful life
:
Reduced from 23 years to 15 years
Residual value
:
Reduced from 15% of the original cost to 10%
In accordance with FRS 8, Accounting Policies, Changes in Accounting
Estimates and Errors, this change in accounting estimates was applied
prospectively from 1 January 2015. Accordingly, the adoption of the new
accounting estimates has no effect on prior years.
The change in the accounting estimates has resulted in an increase to the
Group’s depreciation charge by:
(A)
S$4.3m in FY2015; and
(B)
S$7.0m for the half year ended 30 September 2015 as compared to the
corresponding periods in the preceding year.
Unless the aircraft are sold to third parties, depreciation charges for future years
are expected to be similarly affected by these changes in accounting estimates.
The effect on the future years is an increase in depreciation charge by S$1.5m
per aircraft per annum.
Please refer to Note 1(h) to the unaudited consolidated financial statements of
(ii)
Return Costs and/or Compensation Fees Payable to the Lessors upon Return of
Operating Leased Aircraft
During FY2015, due to return of aircraft from associates, the Group re-assessed
the return costs and/or compensation fees payable to the lessors upon return of
the operating leased aircraft. The Group aims to establish adequate provision in
its financial statement to fulfil its legal obligations to the lessors as of 31 March
2015.
In accordance with FRS 8, Accounting Policies, Changes in Accounting
Estimates and Errors, this change in accounting estimates was applied
prospectively with effect from FY2015. Accordingly, the adoption of the new
accounting estimates has no effect on prior years.
As a result of this change on a prospective basis, the Group’s maintenance
charges increased by:
(A)
S$12.8m in FY2015; and
II-19
(B)
S$0.9m for the half year ended 30 September 2015 as compared to the
corresponding periods of the preceding year.
Maintenance charges for future years are expected to be affected by these
changes in accounting estimates.
Please refer to Note 1(e) to the unaudited consolidated financial statements of
(c)
Maintenance, material and repair
To assure aircraft safety and airworthiness, the Group entered into aircraft
maintenance agreements with various service providers. In one of the long-life
maintenance agreements entered into by the Group in 2009, the unit rate charged by
the service provider will step up after an engine undergoes the first major overhaul. As
and when the related engines undergo their first major overhaul, the cash outflows
relating to this maintenance charge thereafter are expected to increase by
approximately S$0.6m per aircraft per annum. This is not expected to have a material
impact on the financial results of the current financial year.
Please refer to Note 1(e) to the unaudited consolidated financial statements of the
Tiger Airways Group for the half year ended 30 September 2015 as announced by the
Company for further details.
(d)
Aircraft and engine leasing arrangements
Where the Group acted as a principal under aircraft and engine leasing arrangements
entered into with Tiger Airways Australia and Tigerair Taiwan Co., Ltd., the lease rental
income is disclosed separately in the consolidated income statement since the lease
rental income stream is deemed as a significant source of income.
Correspondingly, the Group recorded the head lease rentals of these subleased
aircraft in the consolidated income statement.
In October 2014, the Group signed an agreement to novate 12 aircraft leases to
IndiGo. During the lease suspension period, IndiGo pays the lease rentals directly to
the head lease lessors. Therefore, the Group does not record the aircraft sublease
income received from IndiGo.
Please refer to Note 1(d) to the unaudited consolidated financial statements of the
Tiger Airways Group for the half year ended 30 September 2015 as announced by the
Company and Note 18 of the Review of Operating and Financial Performance to the
audited consolidated financial statements of the Tiger Airways Group for FY2015 for
further details.
Save as disclosed in paragraphs 8.3 and 8.4 of Appendix II to this Circular; in the notes
to the unaudited consolidated financial statements of the Tiger Airways Group for the
half year ended 30 September 2015 as announced by the Company and in the notes
to the audited consolidated financial statements of the Tiger Airways Group for
FY2015:
(a)
there are no significant accounting policies or any matter from the notes of the
financial statements of the Group which are of any major relevance for the
interpretation of the financial statements of the Group; and
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(b)
8.5
as at the Latest Practicable Date, there is no change in the accounting policy of
the Group which will cause the figures disclosed in this Circular not to be
comparable to a material extent.
Material Changes in Financial Position
Save as disclosed in publicly available information on the Tiger Airways Group (including
but not limited to the Company’s announcement on the unaudited consolidated financial
statements of the Tiger Airways Group for the half year ended 30 September 2015), as at
the Latest Practicable Date, there has been no known material change in the financial
position of the Group since 31 March 2015, being the date of the Company’s last published
audited consolidated financial statements.
8.6
Material Change in Information
Save as disclosed in this Circular and save for the information relating to the Company and
the Offer and the PCCS Offer that is publicly available, there has been no material change
in any information previously published by or on behalf of the Company during the period
commencing from the Offer Announcement Date and ending on the Latest Practicable Date.
9.
GENERAL
9.1
All expenses and costs incurred by the Company in relation to the Offer and the PCCS Offer
will be borne by the Company.
9.2
The independent financial adviser, MKES, has given and has not withdrawn its written
consent to the issue of this Circular with the inclusion of its name in this Circular, its advice
to the Independent Directors set out in Section 11.3 of this Circular, the IFA Letter set out
in Appendix I to this Circular and all references thereto in the form and context in which they
appear in this Circular.
10.
DOCUMENTS FOR INSPECTION
Copies of the following documents are available for inspection at the registered address of
the Registrar at 50 Raffles Place, #32-01, Singapore Land Tower, Singapore 048623 during
normal business hours for the period during which the Offer and the PCCS Offer remains
open for acceptance:
(a)
the memorandum and articles of association of the Company;
(b)
annual reports of the Company for FY2013, FY2014 and FY2015;
(c)
the Company’s announcement on the unaudited consolidated financial statements of
the Group for the half year ended 30 September 2015 and its accompanying notes;
(d)
the IFA Letter as set out in Appendix I to this Circular; and
(e)
the letter of consent from MKES referred to in paragraph 9.2 of Appendix II to this
Circular.
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APPENDIX III
EXTRACT OF ARTICLES
(a)
Rights in respect of Capital
“SHARES
6.
Notwithstanding the provisions of Article 5 but subject to and in accordance with the Act, the
Company may purchase or otherwise acquire its issued shares on such terms and in such
manner as the Company may from time to time think fit. If required by the Act, any share that
is so purchased or acquired by the Company shall, unless held in treasury in accordance with
the Act, be deemed to be cancelled immediately on purchase or acquisition by the Company.
On the cancellation of a share as aforesaid, the rights and privileges attached to that share
shall expire. In any other instance, the Company may hold or deal with any such share which
is so purchased or acquired by it in such manner as may be permitted by, and in accordance
with, the Act.
7.
Subject to the Statutes and these Articles, no shares may be issued by the Directors without
the prior approval of the Company in General Meeting but subject thereto and to Articles 59
to 61, and to any special rights attached to any shares for the time being issued, the Directors
may allot and issue shares or grant options over or otherwise dispose of the same to such
persons on such terms and conditions and for such consideration and at such time and
subject or not to the payment of any part of the amount thereof in cash as the Directors may
think fit, and any shares may be issued with such preferential, deferred, qualified or special
rights, privileges or conditions as the Directors may think fit, and preference shares may be
issued which are or at the option of the Company are liable to be redeemed, the terms and
manner of redemption being determined by the Directors, Provided always that:
(a)
(subject to any direction to the contrary that may be given by the Company in General
Meeting) any issue of shares for cash to Members holding shares of any class shall be
offered to such Members in proportion as nearly as may be to the number of shares of
such class then held by them and the provisions of the second sentence of Article 59
with such adaptations as are necessary shall apply; and
(b)
any other issue of shares, the aggregate of which would exceed the limits referred to in
Article 60, shall be subject to the approval of the Company in General Meeting.
8.
Preference shares may be issued subject to such limitation thereof as may be prescribed by
any Stock Exchange upon which shares in the Company may be listed. Preference
shareholders shall have the same rights as ordinary shareholders as regards receiving of
notices, reports and balance sheets and attending General Meetings of the Company, and
preference shareholders shall also have the right to vote at any meeting convened for the
purpose of reducing the capital or winding-up or sanctioning a sale of the undertaking of the
Company or where the proposal to be submitted to the meeting directly affects their rights
and privileges or when the dividend on the preference shares is more than six months in
arrear.
9.
The Company has power to issue further preference capital ranking equally with, or in priority
to, preference shares already issued.
10. Without prejudice to any special rights previously conferred on the holders of any shares or
class of shares for the time being issued, any share in the Company may be issued with such
preferred, deferred or other special rights, or subject to such restrictions, whether as regards
dividend, return of capital, voting or otherwise, as the Company may from time to time by
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Ordinary Resolution determine (or, in the absence of any such determination, as the
Directors may determine) and subject to the provisions of the Statutes, the Company may
issue preference shares which are, or at the option of the Company are liable, to be
redeemed.
11.
The Company shall not exercise any right in respect of treasury shares other than as
provided by the Act. Subject thereto, the Company may hold or deal with its treasury shares
in the manner authorised by, or prescribed pursuant to, the Act.
12. Subject to the provisions of these Articles and of the Statutes relating to authority,
pre-emption rights and otherwise and of any resolution of the Company in General Meeting
passed pursuant thereto, all new shares shall be at the disposal of the Directors and they
may allot (with or without conferring a right of renunciation), grant options over or otherwise
dispose of them to such persons, at such times and on such terms as they think proper.
13. (a)
Whenever the share capital of the Company is divided into different classes of shares,
subject to the provisions of the Statutes, preference capital, other than redeemable
preference capital, may be repaid and the special rights attached to any class may be
varied or abrogated either with the consent in writing of the holders of three-quarters of
the issued shares of the class or with the sanction of a Special Resolution passed at a
separate General Meeting of the holders of the shares of the class (but not otherwise)
and may be so repaid, varied or abrogated either whilst the Company is a going concern
or during or in contemplation of a winding-up.
(b)
To every such separate General Meeting all the provisions of these Articles relating to
General Meetings of the Company and to the proceedings thereat shall mutatis
mutandis apply except that the necessary quorum shall be two persons at least holding
or representing by proxy or attorney at least one-third of the issued shares of the class
and that any holder of shares of the class present in person or by proxy or attorney may
demand a poll, and that every such holder shall on a poll have one vote for every share
of the class held by him, Provided always that where the necessary majority for such a
Special Resolution is not obtained at such General Meeting, consent in writing if
obtained from the holders of three-quarters of the issued shares of the class concerned
within two months of such General Meeting shall be as valid and effectual as a Special
Resolution carried at such General Meeting.
(c)
Where all the issued shares of the class are held by one person, the necessary quorum
shall be one person and such holder of shares of the class present in person or by proxy
or by attorney may demand a poll.
(d)
The foregoing provisions of this Article shall apply to the variation or abrogation of the
special rights attached to some only of the shares of any class as if each group of
shares of the class differently treated formed a separate class the special rights
whereof are to be varied.
14. The special rights attached to any class of shares having preferential rights shall not unless
otherwise expressly provided by the terms of issue thereof be deemed to be varied by the
issue of further shares ranking as regards participation in the profits or assets of the
Company in some or all respects pari passu therewith but in no respect in priority thereto.
15. The Company may pay commissions or brokerage on any issue of shares at such rate or
amount and in such manner as the Directors may deem fit. Such commissions or brokerage
may be satisfied by the payment of cash or the allotment of fully or partly paid shares or partly
in one way and partly in the other.
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16. If any shares of the Company are issued for the purpose of raising money to defray the
expenses of the construction of any works or the provisions of any plant which cannot be
made profitable for a long period, the Company may, subject to the conditions and
restrictions mentioned in the Act pay interest on such of the shares (excluding treasury
shares) as is for the time being paid up and may charge the same to capital as part of the
cost of the construction or provision.
17. Subject to the terms and conditions of any application for shares, the Directors shall allot
shares applied for within ten Market Days of the closing date (or such other period as may
be approved by any Stock Exchange upon which shares in the Company may be listed) of
any such application. The Directors may, at any time after the allotment of any share but
before any person has been entered in the Register of Members as the holder or (as the case
may be) before that share is entered against the name of a Depositor in the Depository
Register, recognise a renunciation thereof by the allottee in favour of some other person and
may accord to any allottee of a share a right to effect such renunciation upon and subject to
such terms and conditions as the Directors may think fit to impose.
18. Except as required by law, no person shall be recognised by the Company as holding any
share upon any trust, and the Company shall not be bound by or compelled in any way to
recognise any equitable, contingent, future or partial interest in any share, or any interest in
any fractional part of a share, or (except only as by these Articles or by law otherwise
provided) any other right in respect of any share, except an absolute right to the entirety
thereof in the person (other than the Depository or its nominee (as the case may be)) entered
in the Register of Members as the registered holder thereof or (as the case may be) the
person whose name is entered in the Depository Register in respect of that share.
ALTERATION OF CAPITAL
59. Subject to any direction to the contrary that may be given by the Company in General
Meeting or except as permitted under the listing rules of the Singapore Exchange Securities
Trading Limited, all new shares shall, before issue, be offered to such persons who as at the
date of the offer are entitled to receive notices from the Company of General Meetings in
proportion, as far as the circumstances admit, to the number of the existing shares to which
they are entitled. The offer shall be made by notice specifying the number of shares offered,
and limiting a time within which the offer, if not accepted, will be deemed to be declined, and,
after the expiration of that time, or on the receipt of an intimation from the person to whom
the offer is made that he declines to accept the shares offered, the Directors may dispose of
those shares in such manner as they think most beneficial to the Company. The Directors
may likewise so dispose of any new shares which (by reason of the ratio which the new
shares bear to shares held by persons entitled to an offer of new shares) cannot, in the
opinion of the Directors, be conveniently offered under this Article 59.
60. Notwithstanding Article 59, the Company may by Ordinary Resolution in General Meeting
give to the Directors a general authority, either unconditionally or subject to such conditions
as may be specified in the Ordinary Resolution, to:
(a)
(i)
issue shares in the capital of the Company (“shares”) whether by way of rights,
bonus or otherwise; and/or
(ii)
make or grant offers, agreements or options (collectively, “Instruments”) that might
or would require shares to be issued, including but not limited to the creation and
issue of (as well as adjustments to) warrants, debentures or other instruments
convertible into shares; and
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(b)
(notwithstanding the authority conferred by the Ordinary Resolution may have ceased
to be in force) issue shares in pursuance of any Instrument made or granted by the
Directors while the Ordinary Resolution was in force,
provided that:–
(1)
the aggregate number of shares to be issued pursuant to the Ordinary Resolution
(including shares to be issued in pursuance of Instruments made or granted
pursuant to the Ordinary Resolution) shall be subject to such limits and manner of
calculation as may be prescribed by the Singapore Exchange Securities Trading
Limited;
(2)
in exercising the authority conferred by the Ordinary Resolution, the Company
shall comply with the provisions of the Listing Manual of the Singapore Exchange
Securities Trading Limited for the time being in force (unless such compliance is
waived by the Singapore Exchange Securities Trading Limited) and these Articles;
and
(3)
(unless revoked or varied by the Company in General Meeting) the authority
conferred by the Ordinary Resolution shall not continue in force beyond the
conclusion of the Annual General Meeting of the Company next following the
passing of the Ordinary Resolution, or the date by which such Annual General
Meeting of the Company is required by law to be held, or the expiration of such
other period as may be prescribed by the Statutes (whichever is the earliest).
61. Except so far as otherwise provided by the conditions of issue or by these Articles, all new
shares shall be subject to the provisions of the Statutes and of these Articles with reference
to allotment, payment of calls, lien, transfer, transmission, forfeiture and otherwise.
62. The Company may by Ordinary Resolution:
(a)
consolidate and divide all or any of its shares;
(b)
subdivide its shares or any of them (subject, nevertheless, to the provisions of the
Statutes) and so that the resolution whereby any share is sub-divided may determine
that, as between the holders of the shares resulting from such sub-division, one or more
of the shares may, as compared with the others, have any such preferred, deferred or
other special rights, or be subject to any such restrictions, as the Company has power
to attach to new shares; and
(c)
subject to the provisions of the Statutes, convert any class of shares into any other
class of shares.
63. The Company may reduce its share capital or any undistributable reserve in any manner and
with and subject to any incident authorised and consent required by law. Without prejudice
to the generality of the foregoing, upon cancellation of any share purchased or otherwise
acquired by the Company pursuant to these Articles, the number of issued shares of the
Company shall be diminished by the number of the shares so cancelled, and, where any such
cancelled share was purchased or acquired out of the capital of the Company, the amount
of share capital of the Company shall be reduced accordingly.
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STOCK
64. The Company may by Ordinary Resolution convert any paid up shares into stock and may
from time to time by like resolution reconvert any stock into paid up shares.
65. The holders of stock may transfer the same or any part thereof in the same manner and
subject to the same Articles as and subject to which the shares from which the stock arose
might previously to conversion have been transferred (or as near thereto as circumstances
admit) but no stock shall be transferable except in such units as the Directors may from time
to time determine.
66. The holders of stock shall, according to the number of stock units held by them, have the
same rights, privileges and advantages as regards dividend, return of capital, voting and
other matters, as if they held the shares from which the stock arose; but no such privilege or
advantage (except as regards dividend and return of capital and the assets on winding up)
shall be conferred by the number of stock units which would not if existing in shares have
conferred that privilege or advantage; and no such conversion shall affect or prejudice any
preference or other special privileges attached to the shares so converted.
67. All such of the provisions of these Articles as are applicable to paid up shares shall apply to
stock and the words “share” and “shareholder” or similar expressions herein shall include
“stock” or “stockholder”.
BONUS ISSUES AND CAPITALISATION OF PROFITS AND RESERVES
179. The Directors may, with the sanction of an Ordinary Resolution of the Company (including
any Ordinary Resolution passed pursuant to Article 60):
(a)
issue bonus shares for which no consideration is payable to the Company, to the
persons registered as holders of shares in the Register of Members or (as the case may
be) in the Depository Register at the close of business on:
(i)
the date of the Ordinary Resolution (or such other date as may be specified therein
or determined as therein provided); or
(ii)
(in the case of an Ordinary Resolution passed pursuant to Article 60) such other
date as may be determined by the Directors,
in proportion to their then holdings of shares; and/or
(b)
capitalise any sum standing to the credit of any of the Company’s reserve accounts or
other undistributable reserve or any sum standing to the credit of profit and loss account
by appropriating such sum to the persons registered as holders of shares in the
Register of Members or (as the case may be) in the Depository Register at the close of
business on:
(i)
the date of the Ordinary Resolution (or such other date as may be specified therein
or determined as therein provided); or
(ii)
(in the case of an Ordinary Resolution passed pursuant to Article 60) such other
date as may be determined by the Directors,
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in proportion to their then holdings of shares and applying such sum on their behalf in
paying up in full new shares (or, subject to any special rights previously conferred on
any shares or class of shares for the time being issued, new shares of any other class
not being redeemable shares) for allotment and distribution credited as fully paid up to
and amongst them as bonus shares in the proportion aforesaid.
180. The Directors may do all acts and things considered necessary or expedient to give effect to
any such bonus issue and/or capitalisation under Article 179, with full power to the Directors
to make such provisions as they think fit for any fractional entitlements which would arise on
the basis aforesaid (including provisions whereby fractional entitlements are disregarded or
the benefit thereof accrues to the Company rather than to the Members concerned). The
Directors may authorise any person to enter on behalf of all the Members interested into an
agreement with the Company providing for any such bonus issue or capitalisation and
matters incidental thereto and any agreement made under such authority shall be effective
and binding on all concerned.
181. In addition and without prejudice to the powers provided for by Articles 179 and 180, the
Directors shall have power to issue shares for which no consideration is payable and/or to
capitalise any undivided profits or other moneys of the Company not required for the
payment or provision of any dividend on any shares entitled to cumulative or non-cumulative
preferential dividends (including profits or other moneys carried and standing to any reserve
or reserves) and to apply such profits or other moneys in paying up in full new shares, in each
case on terms that such shares shall, upon issue, be held by or for the benefit of participants
of any share incentive or option scheme or plan implemented by the Company and approved
by shareholders in General Meeting and on such terms as the Directors shall think fit.”
(b)
Rights in respect of Voting
“PROCEEDINGS AT GENERAL MEETINGS
75. No business other than the appointment of a chairman shall be transacted at any General
Meeting unless a quorum is present at the time when the meeting proceeds to business.
Save as herein otherwise provided, the quorum at any General Meeting shall be two or more
Members present in person or by proxy or attorney representing one-third or more of the total
issued voting shares. Provided that (i) a proxy or attorney representing more than one
Member shall only count as one Member for the purpose of determining the quorum; and (ii)
where a Member is represented by more than one proxy or attorney such proxies shall count
as only one Member for the purpose of determining the quorum.
76. If within 30 minutes from the time appointed for a General Meeting (or such longer interval
as the chairman of the meeting may think fit to allow) a quorum is not present, the meeting,
if convened on the requisition of Members, shall be dissolved. In any other case it shall stand
adjourned for fourteen (14) days (and if that day is a public holiday then to the next business
day following that public holiday) at the same time and place or such other day, time or place
as the Directors may by not less than ten days’ notice appoint. At the adjourned meeting two
or more Members present in person or by proxy or attorney representing one-third or more
of the total issued voting shares shall be a quorum.
77. A General Meeting may be held in Singapore or elsewhere.
78. The Chairman of the Board of Directors, failing whom the Deputy Chairman, shall preside as
chairman at a General Meeting. If there be no such Chairman or Deputy Chairman, or if at
any meeting neither be present within ten minutes after the time appointed for holding the
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meeting and willing to act, the Directors present shall choose one of their number (or, if no
Director be present or if all the Directors present decline to take the chair, the Members
present shall choose one of their number) to be chairman of the meeting.
79. The Chairman may, with the consent of any meeting at which a quorum is present (and shall
if so directed by the meeting) adjourn the meeting from time to time (or sine die) and from
place to place, but no business shall be transacted at any adjourned meeting except
business which might lawfully have been transacted at the meeting from which the
adjournment took place. Where a meeting is adjourned sine die, the time and place for the
adjourned meeting shall be fixed by the Directors. When a meeting is adjourned for thirty
days or more or sine die, notice of the adjourned meeting shall be given as in the case of the
original meeting.
80. Save as hereinbefore expressly provided, it shall not be necessary to give any notice of an
adjournment or of the business to be transacted at an adjourned meeting.
81. If an amendment shall be proposed to any resolution under consideration but shall in good
faith be ruled out of order by the chairman of the meeting, the proceedings on the substantive
resolution shall not be invalidated by any error in such ruling. In the case of a resolution duly
proposed as a Special Resolution, no amendment thereto (other than a mere clerical
amendment to correct a patent error) may in any event be considered or voted upon.
82. At any General Meeting a resolution put to the vote of the meeting shall be decided on a show
of hands unless a poll is (before or on the declaration of the result of the show of hands)
demanded by:
(a)
the chairman of the meeting; or
(b)
not less than two Members present in person or by proxy or attorney and entitled to vote
at the meeting; or
(c)
a Member present in person or by proxy or attorney and representing not less than
one-tenth of the total voting rights of all the Members having the right to vote at the
meeting; or
(d)
a Member present in person or by proxy or attorney and holding not less than 10 per
cent. of the total number of paid-up shares of the Company (excluding treasury shares).
A demand for a poll may be withdrawn only with the approval of the meeting. Unless a poll
is required a declaration by the chairman of the meeting that a resolution has been carried,
or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the
minute book, shall be conclusive evidence of that fact without proof of the number or
proportion of the votes recorded for or against such resolution.
83. If a poll is required, it shall be taken in such manner (including the use of ballot or voting
papers) as the chairman of the meeting may direct, and the result of the poll shall be deemed
to be the resolution of the meeting at which the poll was demanded. The chairman of the
meeting may (and if so directed by the meeting shall) appoint scrutineers and may adjourn
the meeting to some place and time fixed by him for the purpose of declaring the result of the
poll.
84. If any votes be counted which ought not to have been counted or might have been rejected,
the error shall not vitiate the result of the voting unless it be pointed out at the same meeting
or at any adjournment thereof and not in any case unless it shall in the opinion of the
chairman of the meeting be of sufficient magnitude.
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85. Nothingwithstanding anything in these Articles to the contrary, the Chairman of a General
Meeting shall not have any second or casting vote under any circumstances whatsoever.
86. A poll demanded on the choice of a chairman or on a question of adjournment shall be taken
immediately. A poll demanded on any other question shall be taken either immediately or at
such subsequent time (not being more than 30 days from the date of the meeting) and place
as the chairman may direct. No notice need be given of a poll not taken immediately.
87. The demand for a poll shall not prevent the continuance of the meeting for the transaction
of any business other than the question on which the poll has been demanded.
VOTES OF MEMBERS
88. (a)
Subject and without prejudice to any special privileges or restrictions as to voting for the
time being attached to any special class of shares for the time being forming part of the
capital of the Company and to Article 11, each Member entitled to vote may vote in
person or by proxy or attorney.
(b)
On a show of hands, every Member who is present in person or by proxy or attorney
shall have one vote (provided that in the case of a Member who is represented by two
proxies, only one of the two proxies as determined by that Member or, failing such
determination, by the chairman of the meeting (or by a person authorised by him) in his
sole discretion shall be entitled to vote on a show of hands) and on a poll every Member
who is present in person or by proxy or attorney shall have one vote for every share
which he holds or represents. For the purpose of determining the number of votes which
a Member, being a Depositor, or his proxy or attorney may cast at any General Meeting
on a poll, the reference to shares held or represented shall, in relation to shares of that
Depositor, be the number of shares entered against his name in the Depository Register
as at 48 hours before the time of the relevant General Meeting as certified by the
Depository to the Company.
89. Where there are joint registered holders of any share any one of such persons may vote and
be reckoned in a quorum at any meeting either personally or by proxy or by attorney or in the
case of a corporation by a representative as if he were solely entitled thereto and if more than
one of such joint holders be so present at any meeting that one of such persons so present
whose name stands first in the Register of Members or the Depository Register in respect of
such share shall alone be entitled to vote in respect thereof. Several executors or
administrators of a deceased Member in whose name any share stands shall for the purpose
of this Article be deemed joint holders thereof.
90. A Member of unsound mind or whose person or estate is liable to be dealt with in any way
under the law relating to mental disorders may vote whether on a show of hands or on a poll
by his committee, curator bonis or such other person as properly has the management of his
estate and any such committee, curator bonis or other person may vote by proxy or attorney.
Provided that such evidence as the Directors may require of the authority of the person
claiming to vote shall have been deposited at the Office not less than forty-eight hours before
the time appointed for holding the meeting.
91. Subject to the provisions of these Articles and the Act every Member shall be entitled to be
present and to vote at any General Meeting either personally or by proxy or by attorney or
in the case of a corporation by a representative and to be reckoned in a quorum in respect
of shares fully paid and in respect of partly paid shares where calls are not due and unpaid.
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92. Where in Singapore or elsewhere a receiver or other person (by whatever name called) has
been appointed by any court claiming jurisdiction in that behalf to exercise powers with
respect to the property or affairs of any Member on the ground (however formulated) of
mental disorder, the Directors may in their absolute discretion, upon or subject to production
of such evidence of the appointment as the Directors may require, permit such receiver or
other person on behalf of such Member to vote in person or by proxy or attorney at any
General Meeting or to exercise any other right conferred by membership in relation to
meetings of the Company.
93. No objection shall be raised to the qualification of any voter except at the meeting or
adjourned meeting at which the vote objected to is given or tendered and every vote not
disallowed at such meeting shall be valid for all purposes. Any such objection made in due
time shall be referred to the chairman of the meeting whose decision shall be final and
conclusive.
94. On a poll votes may be given either personally or by proxy or by attorney or in the case of
a corporation by its representative and a person entitled to more than one vote need not use
all his votes or cast all the votes he uses in the same way.
95. An instrument appointing a proxy or attorney shall be in writing in any usual or common form
or in any other form which the Directors may approve and:
(a)
in the case of an individual shall be signed by the appointor or by his attorney; and
(b)
in the case of a corporation shall be either under the common seal or signed by its
attorney or by an officer on behalf of the corporation.
96. The signature on such instrument need not be witnessed. Where an instrument appointing
a proxy or attorney is signed on behalf of the appointor by an attorney, the letter or power of
attorney or a duly certified copy thereof must (failing previous registration with the Company)
be lodged with the instrument of proxy or attorney pursuant to Article 101, failing which the
instrument may be treated as invalid.
97. A Member may appoint not more than two proxies to attend and vote at the same General
Meeting, Provided that if the Member is a Depositor, the Company shall be entitled and
bound:
(a)
to reject any instrument of proxy or attorney lodged if the Depositor is not shown to have
any shares entered against his name in the Depository Register as at 48 hours before
the time of the relevant General Meeting as certified by the Depository to the Company;
and
(b)
to accept as the maximum number of votes which in aggregate the proxy or attorney or
proxies or attorneys appointed by the Depositor is or are able to cast on a poll a number
which is the number of shares entered against the name of that Depositor in the
Depository Register as at 48 hours before the time of the relevant General Meeting as
certified by the Depository to the Company, whether that number is greater or smaller
than the number specified in any instrument of proxy or attorney executed by or on
behalf of that Depositor.
98. The Company shall be entitled and bound, in determining rights to vote and other matters in
respect of a completed instrument of proxy or attorney submitted to it, to have regard to the
instructions (if any) given by and the notes (if any) set out in the instrument of proxy or
attorney.
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99. In any case where a form of proxy or attorney appoints more than one proxy or attorney, the
proportion of the shareholding concerned to be represented by each proxy or attorney shall
be specified in the form of proxy or attorney.
100. A proxy or attorney need not be a Member of the Company.
101. An instrument appointing a proxy or attorney must be left at such place or one of such places
(if any) as may be specified for that purpose in or by way of note to or in any document
accompanying the notice convening the meeting (or, if no place is so specified, at the Office)
not less than 48 hours before the time appointed for the holding of the meeting or adjourned
meeting or (in the case of a poll taken otherwise than at or on the same day as the meeting
or adjourned meeting) for the taking of the poll at which it is to be used, and in default shall
not be treated as valid. The instrument shall, unless the contrary is stated thereon, be valid
as well for any adjournment of the meeting as for the meeting to which it relates; Provided
that an instrument of proxy or attorney relating to more than one meeting (including any
adjournment thereof) having once been so delivered for the purposes of any meeting shall
not be required again to be delivered for the purposes of any subsequent meeting to which
it relates.
102. An instrument appointing a proxy or attorney shall be deemed to include the right to demand
or join in demanding a poll, to move any resolution or amendment thereto and to speak at the
meeting.
103. A vote cast by proxy or attorney shall not be invalidated by the previous death or insanity of
the principal or by the revocation of the appointment of the proxy or attorney or of the
authority under which the appointment was made, Provided that no intimation in writing of
such death, insanity or revocation shall have been received by the Company at the Office at
least one hour before the commencement of the meeting or adjourned meeting or (in the
case of a poll taken otherwise than at or on the same day as the meeting or adjourned
meeting) the time appointed for the taking of the poll at which the vote is cast.
104. Any corporation which is a Member may by resolution of its directors or other governing body
authorise such person as it thinks fit to act as its representative at any meeting of the
Company or of any class of Members. The person so authorised shall be entitled to exercise
the same powers on behalf of the corporation as the corporation could exercise if it were an
individual Member and such corporation shall for the purposes of these Articles (but subject
to the Act) be deemed to be present in person at any such meeting if a person so authorised
is present thereat.”
(c)
Rights in respect of Dividends
“TRANSMISSION OF SHARES
42. Save as otherwise provided by or in accordance with these Articles, a person becoming
entitled to a share in consequence of the death or bankruptcy of a Member shall be entitled
to the same dividends and other advantages to which he would be entitled if he were the
registered holder of the share except that he shall not be entitled in respect thereof to
exercise any right conferred by membership in relation to meetings of the Company until he
shall have been registered as a Member in the Register of Members or his name shall have
been entered in the Depository Register in respect of the share. Where two or more persons
are jointly entitled to any share in consequence of the death of a Member, such persons shall
for the purposes of these Articles be deemed to be joint holders of the share.
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FORFEITURE AND LIEN
50. If any Member fails to pay in full any call or instalment of a call on the day appointed for
payment thereof, the Directors may at any time thereafter serve a notice on such Member
requiring payment of so much of the call or instalment as is unpaid together with any interest
and expenses which may have accrued.
51. The notice shall name a further day (not being less than fourteen days from the date of
service of the notice) on or before which and the place where the payment required by the
notice is to be made, and shall state that in the event of non-payment in accordance
therewith the shares on which the call was made will be liable to be forfeited.
52. If the requirements of any such notice as aforesaid are not complied with, any share in
respect of which such notice has been given may at any time thereafter, before payment of
all calls and interest and expenses due in respect thereof be forfeited by a resolution of the
Directors to that effect. Such forfeiture shall include all dividends declared in respect of the
forfeited share and not actually paid before the forfeiture. The Directors may accept a
surrender of any share liable to be forfeited hereunder.
DIVIDENDS AND RESERVES
161. The Company may by Ordinary Resolution declare dividends but (without prejudice to the
powers of the Company to pay interest on share capital as hereinbefore provided) no
dividend shall be payable except out of the profits of the Company available for distribution
under the provisions of the Statutes, or in excess of the amount recommended by the
Directors.
162. Subject to any rights or restrictions attached to any shares or class of shares and except as
otherwise permitted under the Act:
(a)
all dividends in respect of shares shall be paid in proportion to the number of shares
held by a Member but where shares are partly paid all dividends shall be apportioned
and paid proportionately to the amounts paid or credited as paid on the partly paid
shares; and
(b)
all dividends shall be apportioned and paid proportionately to the amounts so paid or
credited as paid during any portion or portions of the period in respect of which the
dividend is paid.
For the purposes of this Article, an amount paid or credited as paid on a share in advance
of a call is to be ignored.
163. If and so far as in the opinion of the Directors the profits of the Company justify such
payments, the Directors may pay the fixed preferential dividends on any class of shares
carrying a fixed preferential dividend expressed to be payable on a fixed date on the
half-yearly or other dates (if any) prescribed for the payment thereof by the terms of issue of
the shares, and subject thereto may also from time to time pay to the holders of any other
class of shares interim dividends thereon of such amounts and on such dates as they may
think fit.
164. No dividend or other moneys payable on or in respect of a share shall bear interest against
the Company.
165. The Directors may deduct from any dividend or other moneys payable to any Member on or
in respect of a share all sums of money (if any) presently payable by him to the Company on
account of calls or in connection therewith.
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166. The Directors may retain any dividend or other moneys payable on or in respect of a share
on which the Company has a lien and may apply the same in or towards satisfaction of the
debts, liabilities or engagements in respect of which the lien exists.
167. The waiver in whole or in part of any dividend on any share by any document (whether or not
under seal) shall be effective only if such document is signed by the shareholder (or the
person entitled to the share in consequence of the death or bankruptcy of the holder) and
delivered to the Company and if or to the extent that the same is accepted as such or acted
upon by the Company.
168. The Directors may retain the dividends payable on shares in respect of which any person is
under the provisions as to the transmission of shares hereinbefore contained entitled to
become a Member or which any person under those provisions is entitled to transfer until
such person shall become a Member in respect of such shares or shall duly transfer the
same.
169. The payment by the Directors of any unclaimed dividends or other moneys payable on or in
respect of a share into a separate account shall not constitute the Company a trustee in
respect thereof. All dividends and other moneys payable on or in respect of a share that are
unclaimed after first becoming payable may be invested or otherwise made use of by the
Directors for the benefit of the Company and any dividend or any such moneys unclaimed
after a period of six years from the date they are first payable may be forfeited and if so shall
revert to the Company but the Directors may at any time thereafter at their absolute
discretion annul any such forfeiture and pay the moneys so forfeited to the person entitled
thereto prior to the forfeiture. If the Depository returns any such dividend or moneys to the
Company, the relevant Depositor shall not have any right or claim in respect of such dividend
or moneys against the Company if a period of six years has elapsed from the date such
dividend or other moneys are first payable.
170. The Company may upon the recommendation of the Directors by Ordinary Resolution direct
payment of a dividend in whole or in part by the distribution of specific assets (and in
particular of paid-up shares or debentures of any other company) and the Directors shall give
effect to such resolution. Where any difficulty arises in regard to such distribution, the
Directors may settle the same as they think expedient and in particular may issue fractional
certificates, may fix the value for distribution of such specific assets or any part thereof, may
determine that cash payments shall be made to any Members upon the footing of the value
so fixed in order to adjust the rights of all parties and may vest any such specific assets in
trustees as may seem expedient to the Directors.
171. (A)
Whenever the Directors or the Company in General Meeting have resolved or proposed
that a dividend (including an interim, final, special or other dividend) be paid or declared
on shares of a particular class in the capital of the Company, the Directors may further
resolve that Members entitled to such dividend be entitled to elect to receive an
allotment of shares of that class credited as fully paid in lieu of cash in respect of the
whole or such part of the dividend as the Directors may think fit. In such case, the
following provisions shall apply:
(a)
the basis of any such allotment shall be determined by the Directors;
(b)
the Directors shall determine the manner in which Members shall be entitled to
elect to receive an allotment of shares of the relevant class credited as fully paid
in lieu of cash in respect of the whole or such part of any dividend in respect of
which the Directors shall have passed such a resolution as aforesaid, and the
Directors may make such arrangements as to the giving of notice to Members,
providing for forms of election for completion by Members (whether in respect of
III-12
a particular dividend or dividends or generally), determining the procedure for
making such elections or revoking the same and the place at which and the latest
date and time by which any forms of election or other documents by which
elections are made or revoked must be lodged, and otherwise make all such
arrangements and do all such things, as the Directors consider necessary or
expedient in connection with the provisions of this Article 171;
(B)
(c)
the right of election may be exercised in respect of the whole of that portion of the
dividend in respect of which the right of election has been accorded provided that
the Directors may determine, either generally or in any specific case, that such
right shall be exercisable in respect of the whole or any part of that portion; and
(d)
the dividend (or that part of the dividend in respect of which a right of election has
been accorded) shall not be payable in cash on the shares of the relevant class in
respect whereof the share election has been duly exercised (the “elected shares”)
and, in lieu and in satisfaction thereof, shares of the relevant class shall be allotted
and credited as fully paid to the holders of the elected shares on the basis of
allotment determined as aforesaid. For such purpose and notwithstanding the
provisions of Article 179, the Directors shall capitalise and apply such amount
standing to the credit of any of the Company’s reserve accounts as the Directors
may determine and/or such other amount as may be permissible in law as may be
required to pay up in full the appropriate number of shares of the relevant class for
allotment and distribution to and among the holders of the elected shares on such
basis.
The shares of the relevant class allotted pursuant to the provisions of Article 171(A)
shall rank pari passu in all respects with the shares of that class then in issue save only
as regards participation in the dividend which is the subject of the election referred to
above (including the right to make the election referred to above) or any other
distributions, bonuses or rights paid, made, declared or announced prior to or
contemporaneous with the payment or declaration of the dividend which is the subject
of the election referred to above, unless the Directors shall otherwise specify.
(C) The Directors may, on any occasion when they resolve as provided in Article 171(A),
determine that rights of election under that paragraph shall not be made available to the
persons who are registered as holders of shares in the Register of Members or (as the
case may be) in the Depository Register, or in respect of shares, the transfer of which
is registered, after such date as the Directors may fix subject to such exceptions as the
Directors think fit, and in such event the provisions of Article 171 shall be read and
construed subject to such determination.
(D) The Directors may, on any occasion when they resolve as provided in Article 171(A),
further determine that no allotment of shares or rights of election for shares under
Article 171(A) shall be made available or made to Members whose registered
addresses entered in the Register of Members or (as the case may be) the Depository
Register is outside Singapore or to such other Members or class of Members as the
Directors may in their sole discretion decide and in such event the only entitlement of
the Members aforesaid shall be to receive in cash the relevant dividend resolved or
proposed to be paid or declared; and
(E)
No allotment of shares or rights of election for shares under Article 171(A) shall be
made available or made to a person, or any persons, if such allotment or rights of
election would in the opinion of the Directors cause such person, or such persons, to
III-13
hold or control voting shares in excess of any shareholding or other limits which may
from time to time be prescribed in any Statute, without the approval of the applicable
regulatory or other authority as may be necessary.
(F)
Notwithstanding the foregoing provisions of this Article, if at any time after the Directors’
resolution to apply the provisions of Article 171(A) in relation to any dividend but prior
to the allotment of shares pursuant thereto, the Directors shall consider that by reason
of any event or circumstance (whether arising before or after such resolution) or by
reason of any matter whatsoever it is no longer expedient or appropriate to implement
that proposal, the Directors may at their discretion and as they deem fit in the interest
of the Company and without assigning any reason therefor, cancel the proposed
application of Article 171(A).
(G) The Directors may do all acts and things considered necessary or expedient to give
effect to the provisions of Article 171(A), with full power to make such provisions as they
think fit in the case of shares of the relevant class becoming distributable in fractions
(including, notwithstanding any provision to the contrary in these Articles, provisions
whereby, in whole or in part, fractional entitlements are disregarded or rounded up or
down).
172. Any dividend or other moneys payable in cash on or in respect of a share may be paid by
cheque or warrant sent through the post to the registered address appearing in the Register
of Members or (as the case may be) the Depository Register of a Member or person entitled
thereto (or, if two or more persons are registered in the Register of Members or (as the case
may be) entered in the Depository Register as joint holders of the share or are entitled
thereto in consequence of the death or bankruptcy of the holder, to any one of such persons)
or to such person at such address as such Member or person or persons may by writing
direct. Every such cheque or warrant shall be made payable to the order of the person to
whom it is sent or to such person as the holder or joint holders or person or persons entitled
to the share in consequence of the death or bankruptcy of the holder may direct and payment
of the cheque or warrant by the banker upon whom it is drawn shall be a good discharge to
the Company. Every such cheque or warrant shall be sent at the risk of the person entitled
to the money represented thereby.
173. Notwithstanding the provisions of Article 172 and the provisions of Article 175, the payment
by the Company to the Depository of any dividend payable to a Depositor shall, to the extent
of the payment made to the Depository, discharge the Company from any liability to the
Depositor in respect of that payment.
174. If two or more persons are registered in the Register of Members or (as the case may be) the
Depository Register as joint holders of any share, or are entitled jointly to a share in
consequence of the death or bankruptcy of the holder, any one of them may give effectual
receipts for any dividend or other moneys payable or property distributable on or in respect
of the share.
175. Any resolution declaring a dividend on shares of any class, whether a resolution of the
Company in General Meeting or a resolution of the Directors, may specify that the same shall
be payable to the persons registered as the holders of such shares in the Register of
Members or (as the case may be) the Depository Register at the close of business on a
particular date and thereupon the dividend shall be payable to them in accordance with their
respective holdings so registered, but without prejudice to the rights inter se in respect of
such dividend of transferors and transferees of any such shares.
176. A transfer of shares shall not pass the right to any dividend declared on such shares before
the registration of the transfer.”
III-14

Circular to Shareholders, PCCS Holders and

Transcription

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