Tiger Airways raising stake in SEAir to 40%

MANILA, Philippines - Singapore-based budget carrier Tiger Airways Holdings Ltd. is raising its stake in local carrier South East Asian Airlines (SEAir).

In a disclosure to the Singapore Exchange on Monday, Tiger Airways said it has signed a revised term sheet for the purchase of a 40 percent stake in SEAir from existing investors for $7 million.

“The revised term sheet is to replace the first term sheet that was signed on Feb. 24 2011,” Tiger Airways said.

It added that the two parties will proceed to finalize the definitive sale and purchase agreement for the stake.

In February last year, Tiger Airways signed an agreement with SEAir for the purchase of a 32.5 percent stake for $6 million.

Avelino Zapanta, president and chief executive officer of SEAir had said then that Tiger Airways’ acquisition of a stake in SEAir would allow the Philippine carrier to expand its network of services.

Last year, the Civil Aeronautics Board (CAB) approved the implementation of a new marketing arrangement for the sale, booking and reservation of SEAir’s flights on Tiger Airways’ website using aircraft leased from the latter.

The CAB in May of last year, halted the implementation of an earlier marketing arrangement as it violated the rules on cabotage, which requires that domestic aviation shall be exclusively undertaken by Philippine carriers.