EGM - proposed sale of 40% shareholding interest in SEAir

EGM - proposed sale of 40%
shareholding interest in SEAir
10 march 2014
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Introduction from Chairman
Group CEO’s presentation
Disposal of SEAir (Tigerair Philippines)
Proposed disposal of entire 40% stake in
SEAir (Tigerair Philippines) to Cebu Air for USD 7m
Tigerair
40%
Others
60%
Before disposal Tigerair owns
40% of SEAir (Tigerair
Philippines)
Tigerair
Cebu Air
Strategic Alliance
100%
After disposal, Cebu Air owns
100% of Seair (Tigerair
Phillipines)
Tigerair EGM
4
Strategic Alliance with Cebu Air
• Collaborate on domestic and international routes
• Create the biggest flight network to the Philippines. More
effective way to penetrate the Philippines market
• Leverage strengths and synergies to enhance network coverage,
flight frequencies, customer service, and jointly market routes
using interline arrangements
• Difficult to derive synergistic benefits if Tigerair
continues to hold SEAir (Tigerair Philippines)
• SEAir (Tigerair Philippines) unlikely to turn
profitable at current scale of operation
Tigerair EGM
5
Highlights of Strategic Alliance
 118
 collaboration on
common routes*
5
flights/week
aircraft
 11
int’l & domestic points
 connectivity
 co-branding
 2,200
 760
flights/week
 48
aircraft
 24
int’l & 33 domestic points
flights/week
 25
aircraft
 38
international points
* subject to competition review
Tigerair EGM
6
Financial Impact on Tigerair Holdings
Assuming the proposed sale had completed on 31 December 2013:
Estimated loss on disposal (SGD ‘m)
Pretransaction
Posttransaction
Change
-
30.3
+30.3
Note:
• The investment in SEAir (Tigerair Philippines) has been fully impaired and the book
value of SEAir (Tigerair Philippines) is carried at zero value as at 31 December 2013
• The estimated loss on disposal is derived by deducting the consideration of SGD
8.8m from the required amount to settle SEAir’s (Tigerair Philippines’) liabilities,
forward sales and transaction cost aggregating to SGD 30.3m, and impairment
loss of SGD 8.8m
Tigerair EGM
7
Summary
The proposed sale of entire 40% shareholding
stake in SEAir (Tigerair Philippines) will:
 Provide an opportunity to enter into a strategic alliance with
Cebu Air
 Create a win-win partnership with Cebu Air to enhance
competitiveness
 Achieve greater cost savings from coordinated operations while
providing more travel options and greater convenience for
customers, without stretching the Group’s financial resources
Tigerair EGM
8
Formal proceedings
EGM
Ordinary Resolution
• The proposed sale by Roar II of its entire 40% shareholding interest in
SEAir to Cebu Air
Tigerair EGM
10
Thank you