Shares of Tiger Airways Holdings rose when trading resumed on Tuesday, after Virgin Australia Holdings said it will buy 60% of the Singapore budget carrier’s Australian unit for A$35 million ($44.3 million).
Tiger shares were up 2% at S$0.75 after a trading halt was lifted in Singapore.
Virgin, Australia’s No.2 carrier, will buy 60% of Tiger Australia and invest a further A$62.5 million to increase the fleet size to 35 aircraft from 11 by 2018.
“The move will allow Tiger Airways to dispose a substantial chunk of the loss making entity whilst allowing it to retain a presence in Australia,” OCBC Investment Research said in a report.
Singapore Airlines, which owns 33% of Tiger, also announced it will buy a 10% stake in Virgin Australia for A$105 million.
Separately, Tiger reported second-quarter net loss of $18.3 million, narrowing from a net loss of $49.9 million a year earlier.
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