Tigerair seeks long-term investor
12 May 2014
Tigerair seeks long-term investor
Saratoga Capital, the majority shareholder of budget airline Tigerair Mandala, is hoping the management of the airline company will find a long-term investor to help keep the ailing company afloat.
Sandiaga S. Uno, a founding partner of equity firm Saratoga, said in Jakarta on Friday that Tigerair Mandala’s management had been tasked with assessing any offers to acquire the airline.
He, however, did not comment specifically about Citilink, a subsidiary of national flag-carrier Garuda Indonesia, which is currently looking to acquire Tigerair Mandala.
“As a representative of Saratoga, we have handed over the assessment task to the management in finding the best strategy for keeping Tigerair Mandala afloat,” he said.
Recent reports said the airline’s Singaporean partner, Tiger Airways, planned to quit the joint venture as the airline had recorded massive losses last year.
Last month, Citilink was reported to have indicated an interest in acquiring Tigerair Mandala, which could strengthen the airline’s regional network.
Citilink president director M. Arief Wibowo said his company had formally submitted an offer to acquire Tigerair.
However, Sandiaga said the management of Tigerair Mandala had not as yet informed the shareholders of the result of its assessment of Citilink’s offer.
“We haven’t heard about further discussions with any investor, but we hope for the best. We are talking about a long-term plan and not just a month-by-month assessment,” he said.
Sandiaga once said that Tiger Airways would remain committed to keeping the low-cost carrier running, despite a Reuters’ report in March saying that the Singaporean partner aimed to sell or close its Indonesian joint venture unless there were signs of a turnaround this year.
Kompas.com quoted Sandiaga in March as saying that the weakening rupiah had forced the carrier to cut a number of its flights, which led to huge losses.
Sandiaga said that the depreciation of the rupiah and the high cost of fuel had seriously affected the company’s finances.
Mandala Airlines ceased operations in 2011 after being suspended by the government due to debts totaling Rp 2.45 trillion (US$212.46 million).
Mandala took to the skies again in 2012 under the new name of Tigerair Mandala, after financial restructuring in which Tiger bought a one-third stake, which was eventually increased to 35.8 percent in September 2013.
Nevertheless, Tiger lost nearly S$40 million ($32.03 million) in the venture in April-December last year,according to Reuters. (gda)
