Tiger Airways

[Belg]

Now that the picture becomes clearer, it seems that SIA might be acting like a prime property developer... and taking tiger airways like a reits. SIA is selling out older planes - to tiger airways, thus freeing up their balance sheet.

All these rights issues are just trying to keep the budget carrier afloat, waiting for the next white knight. I am totally buffed at why skoot and tiger are competing on the same flight lines. Not sure if it's one of those scholar's brilliant of creating competition to push for results.

But alas - 两虎争斗, 必有一伤。

[Tiggerbee]

I am stuck with this Tiger using CPF fund.

Now they are calling for another rights. Should I continue with it?

Since they are so confident abt future, how come SIA or Temasek cannot come in & buy out the minority shares? Give a good price say 70ct & close the chapter, just like MAS.

Did you see Temasek buying out Chartered Semiconductor when the company is in equally bad shape as Tiger? That will answer your question.

[greengiraffe]

I am stuck with this Tiger using CPF fund.

Now they are calling for another rights. Should I continue with it?

Since they are so confident abt future, how come SIA or Temasek cannot come in & buy out the minority shares? Give a good price say 70ct & close the chapter, just like MAS.

Did you see Temasek buying out Chartered Semiconductor when the company is in equally bad share as Tiger? That will answer your question.

Lesson here, never be an ostrich to bury head in the hole when there is a big fire... when fire out of control and over, there will be only a charred ostrich left...

Must always know when to cut losses especially when there is a fundamental shift in the company invested.

GG

[CY09]

Hi hh488,

I will answer to question directly. If I am a Tiger shareholder now, I will obtain my rights and sell it in the open market when the rights start trading. Alternatively, you may opt not to subscribe for the rights (if your allocated rights is less than 12,000 lots) and let SIA subscribe for the excess rights. Main reason is because I do not see a fundamental shift in Tiger over the next 3 years. The LCC industry will still be competitive given that Airasia and Jetstar will fight Scoot/Tiger. Secondly, if one notices, Tiger is raising cash almost every year. Its like an annual affair to keep itself a float. Next, please note in 2015, Tiger is taking delivery of 25 airbuses A320neo and this points to another capital raising in the future, unless Scoot or SIA volunteers to take over the delivery of airbuses. Each one cost about $100M, Tiger has paid about $100M for these 25 aircraft orders so far and this means US$2 Billion of payables is left upon its delivery in 2015, it is likely Tiger will finance this by part bank loan/ part cash raising.

Post rights, Tiger's debt to equity will already be about 90% for now and further loans needing to raise payment for these 25 Airbuses will result in Tiger being highly geared again, warranting another round of rights.(Those who are aware of how airplane cash payment is done, please feel free to correct me on this.) I wont be surprised Tiger raises another round of rights and during that time, you may consider applying for the excess rights, provided the LCC outlook improves. Lastly, from now to end 2015, you have to contend with the knowledge, Tiger is forecasted to make another s$50M in operating losses.

Please note this is just my opinion and I shall not be held liable if exercising or applying for rights now is the right investment decision.

[em2nre5u]

If you attend the AGM and try talking to the CEO , likely you will lose confidence in the management.
EQ is very important in conducting biz , especially in service industries. (Just my opinion)
I sold all my holdling after first AGM with him.

Can you elaborate on your experience ? You referring to the new CEO (Lee LH) or the last AGM with the old CEO (Koay PY) ?

[em2nre5u]

Hi hh488,

I will answer to question directly. If I am a Tiger shareholder now, I will obtain my rights and sell it in the open market when the rights start trading. Alternatively, you may opt not to subscribe for the rights (if your allocated rights is less than 12,000 lots) and let SIA subscribe for the excess rights. Main reason is because I do not see a fundamental shift in Tiger over the next 3 years. The LCC industry will still be competitive given that Airasia and Jetstar will fight Scoot/Tiger. Secondly, if one notices, Tiger is raising cash almost every year. Its like an annual affair to keep itself a float. Next, please note in 2015, Tiger is taking delivery of 25 airbuses A320neo and this points to another capital raising in the future, unless Scoot or SIA volunteers to take over the delivery of airbuses. Each one cost about $100M, Tiger has paid about $100M for these 25 aircraft orders so far and this means US$2 Billion of payables is left upon its delivery in 2015, it is likely Tiger will finance this by part bank loan/ part cash raising.

Post rights, Tiger's debt to equity will already be about 90% for now and further loans needing to raise payment for these 25 Airbuses will result in Tiger being highly geared again, warranting another round of rights.(Those who are aware of how airplane cash payment is done, please feel free to correct me on this.) I wont be surprised Tiger raises another round of rights and during that time, you may consider applying for the excess rights, provided the LCC outlook improves. Lastly, from now to end 2015, you have to contend with the knowledge, Tiger is forecasted to make another s$50M in operating losses.

Please note this is just my opinion and I shall not be held liable if exercising or applying for rights now is the right investment decision.

I don't think they are taking delivery of 25 A320neo, only about 2 for 2015/16. They next plane deliveries will be for A320ceo, in 2018...

[CY09]

Hi,

Thanks for highlighting. Nevertheless, the need to raise money for deliveries of about US $2 Billion from 2018 to 2025, shows signs that Tiger is poised to raise cash. Also the new flight order is the airbus 320 neo (still the same name). To finance this order, Tiger has to generate s$60M in cash annually to pay for it (I assume 20% will be financed by internal resources and 80% by bank loans). For Tiger to turnaround under such circumstances in 4 years, given the overcapacity, is almost impossible. Hence, my prediction is more rounds of rights issuance will occur.

Looking at the short term, I think Tiger may even have difficulties funding the remaining proceeds for the two aircrafts deliveries in 2015 through internal resources as it is losing cash. It is also worth noting Tiger will be grounding/has grounded 8 of its airplanes this FY, which will lead to lower revenue

[Tiggerbee]

I am stuck with this Tiger using CPF fund.

Now they are calling for another rights. Should I continue with it?

Since they are so confident abt future, how come SIA or Temasek cannot come in & buy out the minority shares? Give a good price say 70ct & close the chapter, just like MAS.

Did you see Temasek buying out Chartered Semiconductor when the company is in equally bad share as Tiger? That will answer your question.

Lesson here, never be an ostrich to bury head in the hole when there is a big fire... when fire out of control and over, there will be only a charred ostrich left...

Must always know when to cut losses especially when there is a fundamental shift in the company invested.

GG

It's easy for Temasek to exit a bad investment. They can simply said that semicon is no longer a attractive industry to invest in. However, it's not so easy for SIA to admit that Tiger was a bad investment since SIA is not an investment company but supposedly one of the best airline company in the world. It might be a matter of face.

[cfa]

Operating profit seems bleak.
Only more right issues or borrowings can keep Tiger going.

[hh488]

I am stuck with this Tiger using CPF fund.

Now they are calling for another rights. Should I continue with it?

Since they are so confident abt future, how come SIA or Temasek cannot come in & buy out the minority shares? Give a good price say 70ct & close the chapter, just like MAS.

Thank you all u buddies,

I learnt my lesson & am still learning too. Likely to cut loss soon.

Yeh, learning to cut loss is no easy matter, friends.