SIA rescues flailing Tigerair with $202.6m share conversion scheme

It now holds a 56% stake in Tigerair.

Loss-making Tigerair is now officially a subsidiary of SIA, after the national carrier completed the conversion of Tigerair’s 189,390,367 non-voting perpetual convertible capital securities into 358,668,482 new Tigerair shares at a conversion price of S$0.565.

The move raised SIA’s stake from 40% to around 56%. According to OCBC, the conversion price is a significant premium above its Thursday closing price.

“Recall that SIA has no intention to take-over Tigerair and hence, the only way to gain majority control is through the PCCS at a premium. That said, while SIA only increased its stake officially up from Friday, it has commenced consolidating financial results of Tigerair as a subsidiary in its accounts since Oct-14. Hence, we think Tigerair will further drag down SIA’s results in the next few quarters as we continue to think Tigerair will still be making losses on low yield environment,” noted OCBC.