Tiger sells its stake in loss-making Philippine unit for US$7m

TIGER Airways has confirmed that it is divesting its 40 per cent stake in loss-making Tigerair Philippines to the Philippines' biggest budget carrier, Cebu Pacific, for US$7 million.

Assuming that the proposed sale had been completed on Sept 30, 2013, the estimated net loss is expected to be around $13.5 million, Tiger said in a release to the Singapore Exchange yesterday. In addition to Tiger's stake, Cebu Pacific will acquire the remaining 60 per cent in Southeast Asian Airlines (SEAir) - as the carrier was known before it was rebranded Tigerair Philippines - for US$8 million. The 60 per cent stake is held by Filipino Tomas B Lopez and other shareholders.

Tiger's wholly owned subsidiary, Roar Aviation II, has signed a binding offer letter with Cebu Air where the latter will acquire 55,000 Common A shares and 145,000 Common B shares in SEAir. The deal is subject to the necessary regulatory and shareholder approvals.