Tony Davis has 8 million pre-IPO option shares at strike prices of between 8-13 cents.
So assuming Tiger IPO’s at $1.65, his paper profit = (1.65-0.13) * 8 million = $12.16 million
A total of 53 directors and employees were granted some 28 million option shares at exercise prices of between eight and 26 cents each.
So on average, each employee gets = (1.65-0.17) * 28 million / 53 = $0.78 million
SUPERB deal for their employees!! Tony Davis will laugh all the way to the bank on 22 Jan. He'll be worth $12m more!
Shelley Roberts will be worth $2.43m more.
Glorious deal. Even if the share price falls 50% on the first day, there will be many, many millionaires in Tiger come 22 Jan!
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Tiger prices retail IPO shares at $1.65
Final price will be fixed after book-building
By VEN SREENIVASAN
TIGER Airways launched its initial public offer yesterday with a maximum offer price of $1.65 per share targeted to raise about $246.8 million, the bulk of which will be used to fund its fleet expansion.
The public/retail tranche of about 12.4 million shares is priced at $1.65, even though the final strike price will be anywhere between $1.35 and $1.65, depending on the institutional response to the ongoing book-building exercise.
Retail investors will be refunded the difference if the final strike price is below $1.65 per share.
Sources close to the deal told BT that with three days to the book-building closure, the company should be 'comfortable with the books and the price'.
Excluding over-allotment, a total of 165.2 million shares are on offer, comprising about 155.6 million issue shares and 9.6 million vendor shares. Net proceeds from the issue shares are expected to be about $246.8 million.
Only Indigo Partners is paring down part of its current 24 per cent stake through the offer of vendor shares, while Ryanasia has a 'green shoe' option to offer up 19.8 million shares for the over-allotment portion.
Singapore Airlines and Temasek Holdings, which together now control 60 per cent of the company, will hold on to their Tiger shares, though their stake will be diluted post-IPO.
Up to $166 million of the funds raised will be used for its planned acquisition of Airbus A320 aircraft and the associated aircraft pre-delivery payments, while $50.4 million will be used to repay outstanding short-term loans secured to finance pre-delivery payments. Another $10.0 million will go towards establishing potential new airline and/or operating bases, while $20.4 million will be used as working capital.
In a teleconference from London yesterday, where he is on an investment road-show, CEO Tony Davis expressed confidence that the IPO marks a new chapter for his budget carrier as it prepares to capitalise on the fastest and potentially largest aviation market in the world.
'We are now in full steam ahead,' he said, and rejected media reports which has said that Tiger had scaled down its IPO in the face of poor reception.
'I believe after five years, we have earned our stripes. We built up a profitable business in Singapore after just three years, and after a start-up year in Australia, we are making good progress with a presence in every major city and every territory.'
He said rather than yield, Tiger would focus on keeping costs down, thus offering the lowest fares and filling all seats. Tiger's consolidated unit cost per seat per km in fiscal year 2009 was 4.7 US cents, while during the six months ended Sept 30, 2009, it was four US cents - one of the lowest in the world.
'We are ready, willing and able to execute the model and are excited about our prospects.'
He also dismissed the recent Jetstar-AirAsia alliance as more show than substance.
'I didn't see a lot of substance in the announcement last week,' he said.
The Australian and Malaysian carriers announced a resource-and-cost sharing alliance which could also include joint aircraft procurement.
Mr Davis said that besides the earmarked $166 million from the IPO proceeds, the 50 aircraft on order would also be funded by profits and cashflow. The airline will have 68 planes by end-2015.
The IPO could indeed mark a coming of age for the airline which at the end of March 2009 reported cumulative losses of $77.0 million in Singapore and A$79.3 million (S$101.8 million) in Australia, respectively. It was also in net liability position of $106.8 million as at end-September 2009. But its first half FY2010 has shown promising numbers, with a potential for break-even in Australia.
Assuming it had issued 155.6 million shares at $1.65 prior to Sept 30, 2009, Tiger would have been in a net asset position of $140.5 million as at Sept 30, 2009.
Tiger's senior management, Singapore Airlines and Temasek Holdings are locked into a no-sale moratorium for six months after the IPO, with the SIA and Temasek having an additional six-month moratorium on half their holdings. Mr Davis has been granted almost eight million pre-IPO option shares with strike prices of between eight and 13 cents, while Tiger Singapore's managing director Rosalynn Tay has about 2.2 million at between 10 and 13 cents per share.
Tiger Australia's managing director Shelley Roberts and chief financial officer Chin Sak Hin have each been granted about 1.6 million shares at 13 cents each. A total of 53 directors and employees were granted some 28 million option shares at exercise prices of between eight and 26 cents each.
The IPO closes on Jan 18, with trading commencing on Jan 22.