Tiger Airways Holdings Limited : Announcement - Acquisition of 40% of the Issued Shares of Southeast Asian Airlines (SEAir), Inc.

The board of directors (the "Board" or the "Directors") of Tiger Airways Holdings Limited (the "Company", and together with its subsidiaries and associated companies, the "Group") refers to its announcement dated 24 February 2011 and the subsequent update announcement dated 16 April 2012 (collectively, the "Announcements") in relation to the signing of a term sheet for the proposed acquisition of a 40% stake in Southeast Asian Airlines (SEAir), Inc. ("SEAir").
Further to the Announcements, the Board wishes to announce that Roar Aviation II Pte. Ltd. ("Roar II"), a wholly-owned subsidiary of the Company, has on 4 June 2012 entered into a sale and purchase agreement (the "SPA") with Iren Dornier and Nick Gitsis (collectively, the "Vendors") for the acquisition (the "Acquisition") of 55,000 Common A shares and 145,000
Common B shares in the issued share capital of SEAir, representing 40% of the issued and outstanding shares of SEAir (the "Acquisition Shares").

2.1 Information on SEAir
SEAir is a company incorporated in the Philippines on 23 March 1995 and has an issued and paid-up capital of 100,000,000 Philippine Pesos consisting of 300,000 Common A shares of par value of 100 Philippine Pesos each, and 200,000 Common B shares of par value of 350
Philippine Pesos each, as at the date of this Announcement.
Established in 1995, SEAir is a commercial airline based in the Philippines. SEAir operates domestic flights within the Philippines and international flights to destinations such as Singapore, Hong Kong, Bangkok and Kota Kinabalu.
2.2 Rationale for the Acquisition
The rationale for the Acquisition is as follows:
(a) the Acquisition is in line with the strategy of the Group (as stated in the prospectus issued in connection with its initial public offering dated 13 January 2010) to grow its business network into a pan-Asian one. The Company currently has a 100% owned subsidiary in Australia. However, as was the case with the Company's subscription of a 33% stake in PT Mandala Airlines (as announced on 23 September 2011), expansion into any other country in the region requires the Company to enter into joint-ventures, with the Company taking a minority shareholding stake due to foreign ownership restrictions for airlines in such countries;
(b) expanding to the Philippines enables the Company to leverage on the economies of scale in its regional network and to leverage on the strength and size of the Company's base in Singapore;
(c) the Company regards SEAir as an opportunity to provide affordable low cost air travel for the domestic and international traveler into and from the Philippines, and to contribute to the economic growth of the country; and
(d) the Company considers SEAir a compelling investment by reason of the strategic and demographic importance of the Philippines.

3.1 Consideration
Under the terms of the SPA, the consideration (the "Consideration") will be a sum of US$7,000,000, minus the agreed liabilities of SEAir (the "Liabilities") as at the completion of the Acquisition ("Closing"), as determined through a due diligence review conducted by the Company's due diligence auditors.
The Consideration will be paid in the following manner:
(a) an initial sum of US$2,000,000 (the "Initial Consideration") to be paid on Closing; and
(b) the amount equivalent to the sum of US$7,000,000 minus (i) the Initial Consideration, (ii) the Liabilities, and (iii) the Retention Sum (as defined below) to be paid within five (5) business days from the date of final determination of (1) the Liabilities and (2) the Potential Liabilities Amount (as defined below).
The Liabilities and the amount of potential outstanding liabilities (including but not limited to any tax liabilities) of SEAir (the "Potential Liabilities Amount") will be agreed by both parties after Closing, based on the closing accounts prepared by SEAir and the results of the due diligence review.
The "Retention Sum" shall be the sum equivalent to the Potential Liabilities Amount to be withheld by the Company, to cover any and all potential outstanding liabilities (including but not limited to any tax liabilities) of SEAir.
3.2 Based on the audited accounts of SEAir for the financial year ended 31 December 2011, the book value (which is the same as the net asset value attributable to the Acquisition Shares) of SEAir as at 31 December 2011 is negative US$7,000,000. Based on the unaudited financial results of SEAir for the 3-month period ended 31 March 2012, the net loss attributable to the Acquisition Shares of SEAir is approximately US$1,000,000.
The Consideration was arrived at pursuant to arm's length negotiations between the Company and the Vendors on a willing-buyer willing-seller basis, after taking into consideration:
(a) the rationale for the Acquisition (as described in Paragraph 2 above); and
(b) SEAir's business prospects, profitability and potential future earnings.
2
3.3 Funding
The Consideration will be satisfied by the Company through internal sources of funds.
3.4 Conditions Precedent
Closing is conditional upon the satisfaction or waiver by 29 June 2012 (or such other date agreed in writing by the Company and the Vendors) of the key conditions precedent including but not limited to the following:
(a) regulatory approvals being obtained from the relevant authorities in the Philippines approving the Acquisition; and
(b) the termination of all non-core businesses of SEAir to enable SEAir to focus on its core low cost carrier model business.
3.5 Other Agreements in Connection with the Acquisition
In connection with the Acquisition, the Company will enter into, inter alia, the following agreements:
(a) the Company, SEAir and the remaining shareholders of SEAir (the "OtherShareholders") will be entering into a shareholders' agreement on Closing in relation to the regulation of their rights and obligations inter se as shareholders of SEAir;
(b) the Company and SEAir will be entering into an advisory services and trademark licence agreement on Closing in relation to certain technical and consultancy services to be provided by the Company to SEAir on an arm's length basis, and in respect of certain intellectual property licences;
(c) the Vendors, the Other Shareholders and Southeast Asian Airlines (SEAir) International, Inc. ("SEAir-I") will be entering into a non-competition and non- solicitation deed on Closing in favour of the Company and SEAir for a period of three (3) years commencing from the date of Closing; and
(d) the Company and the Other Shareholders will be entering into an option deed on Closing pursuant to which an option will be granted to the Company, which when exercised will enable the Company to propose a local independent third party (or local independent third parties) who shall be a Filipino citizen(s) or a Philippine national(s) acceptable to the Other Shareholders to purchase their shareholding interests in SEAir.

Chapter 10 of the Listing Manual of the Singapore Exchange Securities Trading Limited ("Listing Manual") governs the continuing listing obligations of listed companies in respect of acquisitions and disposals. The relative figures of the Acquisition computed on the bases as set out in Rule 1006 of the Listing Manual are as follows:
(a) Net asset value test (Rule 1006(a))
Not applicable to the Acquisition as this test is not applicable to an acquisition of assets.
3
(b) Net profits test (Rule 1006(b))
Please note that the figures below are derived from SEAir's unaudited pro forma accounts for the 12-month period ended on 31 March 2012 prepared by SEAir's management and the Group's latest announced audited financial statements for the financial year ended 31 March 2012.

*calculated based on the market exchange rate of US$1.00 to S$1.2965 as at 31 May 2012.

Note:

(1) As the Company will only be acquiring the A320 Family jet operations of SEAir, the Company has, in its computation based on the pro forma management accounts of SEAir, not included the losses attributable to the other operations of SEAir. The computation of the profits (losses) attributable to the assets acquired is based on the economic interest in SEAir, which is derived from the par value of the Acquisition Shares.

(c) Market capitalisation test (Rule 1006(c))

*calculated based on the market exchange rate of US$1.00 to S$1.2965 as at 31 May 2012.

Note:

(1) Please note that the final consideration is expected to be lower than the estimated figure set out above following the adjustments set out in Paragraph 3.1 above. If the final figure is lower, the relative figure for the market capitalisation test will correspondingly decrease.

(d) Equity securities test (Rule 1006(d))
Not applicable as no equity securities are to be issued in connection with the
Acquisition.
4

The pro forma financial effects of the Acquisition on the Group are for illustrative purposes only and are neither indicative of the actual financial effects of the Acquisition on the net tangible assets ("NTA") per ordinary share in the share capital of the Company ("Share") and earnings per Share ("EPS"), nor do they represent the actual financial position and/or results of the Group immediately after the completion of the Acquisition.
The financial effects of the Acquisition have been prepared based on the following assumptions:
(a) for the purpose of computing the financial effects of the Acquisition on the NTA per
Share, the Acquisition is assumed to have been completed on 31 March 2012; and
(b) for the purpose of computing the financial effects of the Acquisition on the EPS, the
Acquisition is assumed to have been completed on 1 April 2011.
5.1 Effect on the NTA per Share as at 31 March 2012
There is no material impact to the Group.

Note:

NTA per share is calculated based on 820,193,308 ordinary shares of the Company in issue as at 31

March 2012.

5.2 Effect on EPS
There is an additional loss of 1.21 cents per Share on a pro forma basis.

5

No Director or controlling Shareholder has any interest, direct or indirect, in the Acquisition, save in respect of his/its shareholdings (if any) in the Company.

A copy of the SPA may be inspected at the registered office of the Company at 50 Raffles Place #32-01 Singapore Land Tower Singapore 048623 during normal business hours for a period of three (3) months from the date of this Announcement.

Joyce Fong
Company Secretary
4 June 2012
6

distributed by