Ryan may sell third of €45m stake in Tiger
Shares jump after IPO raises €120m for carrier
RYANAIR founder Declan Ryan may sell a third of his shares (worth €16m) in loss-making Asian low-cost airline Tiger Airways, which completed its smaller than expected €420m IPO last Thursday.
Under a "green shoe" option agreed with the underwriters, Mr Ryan may have to sell nearly 20 million shares to meet investor demand. This option expires 30 days after shares began trading. The retail element of the flotation was 21 times subscribed. Morgan Stanley, Citigroup and DBS group advised on the initial public offering on Singapore's stock market.
Mr Ryan and his company Ryanasia have agreed to a lock-in arrangement, which means they cannot sell any shares for the next six months if the "green shoe" option does not kick in. Ryan's lock-in is for a far shorter period than the other shareholders.
Tiger Airways floated last Thursday, with its shares rising five per cent in the first two days of trading. The company raised €120m from the share issue, which has been earmarked to buy new jets, repay some loans and to set up another new low-cost airline, according to the Tiger prospectus, seen by the Sunday Independent.
Mr Ryan's investment group Ryanasia saw its stake fall from 16 per cent to 10.2 per cent following the flotation. Based on Friday's closing price, this values the Ryanasia shares at nearly €45m.
Last year, when news of the impending flotation broke, analysts had forecast a value of nearly €750m for the airline, suggesting that Mr Ryan's stake could be worth more than €100m. However, valuations in the sector have since slumped.
It has also emerged that Mr Ryan is not the sole owner of the Ryanasia stake, according to the prospectus. Declan Ryan is the beneficial owner of 50 per cent of the shares, with other shares held in trust for certain co-owners. Former GPA executive Maurice Mason owns 14.38 per cent of Ryanasia, worth over €6m.
Mr Mason, who serves as Mr Ryan's representative on the Tiger Airways board, has also been involved in some of the Ryan family's other airline punts. His Kite Investments firm has been an investor in US Allegiant Air, which floated on Nasdaq in 2005, as well as being a backer of Mexican carrier Aerobus.
These investments have been magnificently successful for Declan Ryan and his cohorts. He spent €5.5m for a 10 per cent chunk of small US low-cost carrier Allegiant Airways in 2005. Just over two years later, he cashed in his shares in an IPO and secondary offering, netting around €26m.
Mr Ryan is thought to have sold close to €40m worth of shares in Ryanair in recent years, with the Ryan family still holding a near €45m slice of the airline.
Apart from Mr Ryan, Tiger Airways is owned by Singapore Air, Singapore sovereign wealth fund Temasek -- which now owns Irish telecoms firm Eircom -- and US investment group Indigo Partners.
Tiger Airways lost nearly €26m last year but passenger numbers rose 49 per cent to over 3.2 million passengers in the year. By comparison, Aer Lingus carried more than 10 million passengers last year.
Tiger Airways now faces increased competition from the new alliance between failed West Ham Football Club buyer Tony Fernandes' Air Asia operation and Australia carrier Jetstar, which was agreed last month.