China Airlines Ltd (CAL, 中華航空) is to sell NT$1.84 billion (US$59.2 million) of Tigerair Taiwan Ltd (台灣虎航) shares ahead of the low-cost carrier’s (LCC) initial public offering (IPO) in the fourth quarter.
CAL holds 180 million shares, or a 90 percent stake, of Tigerair, higher than the Taiwan Stock Exchange’s (TWSE) limit of 70 percent stake that a parent company could have in a publicly owned subsidiary.
CAL this month is to sell 45 million shares to its own shareholders at NT$41 per share, cutting its holding of Tigerair to 67.5 percent, CAL spokesman Jason Liu (劉朝洋) told the Taipei Times by telephone.
The price is much higher than CAL’s share price of NT$9.79 in Taipei trading yesterday, as Tigerair’s profits have grown steadily since 2017, Liu said, adding that the subsidiary would reveal its net value this month.
The proposed sale, which is to be completed in late September, would help CAL recover from a 75 percent plunge in pretax profit in the first quarter due to a pilot strike, Liu said.
Mandarin Airlines (華信航空), another CAL subsidiary, has a 10 percent stake in Tigerair, or 20 million shares, but has no plans to sell the shares, Liu said.
Tigerair plans to make its debut on the Taipei Exchange’s Emerging Stock Board in December and to move to the main bourse “in the fourth quarter next year” at the earliest if its application is approved by the TWSE, CAL said.
“Tigerair, the most profitable subsidiary of CAL, would be the nation’s first publicly traded LCC,” Liu said. “We would like to know whether investors are willing to buy Tigerair shares based on its promising outlook.”
Tigerair, launched in 2014, has seen passenger numbers and profits grow steadily since 2017.
Revenue rose 12.7 percent annually to NT$2.51 billion in the first quarter, Tigerair communication officer Emily Yu (于煥永) said by telephone.
It has 11 Airbus A320 single-aisle aircraft and operates 29 international routes, including two routes from Taiwan to the Philippines launched this year, Yu said.
Tigerair in March said that it would expand its fleet to facilitate faster growth.
The company has not finalized details of the plan, such as the number of aircraft to be purchased, she said.
ARIZONA PROJECT: A spokeswoman said that TSMC appreciates the support from US authorities, which gives it and its partners confidence about future investments City officials in Phoenix, Arizona, on Wednesday approved a slate of financial incentives and government support for Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) planned US$12 billion chip plant, a step toward bringing high-tech manufacturing to the US and addressing national security concerns over the industry supply chain. The city agreed to provide about US$200 million to develop roads, sewers and other infrastructure, according to a notice from the city council. At least one additional set of traffic lights would be included for a cost of approximately US$500,000. The company is conducting due diligence on several locations in Phoenix with a final decision to
HARD ASK: At a meeting held by the MOEA to talk about the RCEP trade deal, trade associations said that they expect the government to push for more free-trade deals Business representatives yesterday urged the government to slow the appreciation of the New Taiwan dollar, saying that some Taiwanese industries have been undercut by rivals due to unfavorable foreign exchange rates. The government should also assist local industries to expand their domestic market, and push for more bilateral trade deals so that Taiwanese companies can enjoy zero or preferential tariffs on exports, following the nation’s exclusion from the Regional Comprehensive Economic Partnership (RCEP) which was signed by 15 Asia-Pacific nations on Nov. 15, they said at a meeting with the Ministry of Economic Affairs (MOEA). Some participants said that the NT dollar’s
A.P. Moller-Maersk A/S is planning to launch a US$1.6 billion share buyback program as the world’s biggest container shipping company weathers the COVID-19 crisis better than expected. Copenhagen-based Maersk, which on Tuesday raised its guidance for a second time since last month, reported a 39 percent rise in earnings before interest, taxes, depreciation and amortization to US$2.3 billion in the third quarter. Profit by that measure, before restructuring and integration costs, would reach US$8 billion to US$8.5 billion this year, the company said. Its previous guidance was for US$7.5 billion to US$8 billion. “The global economic environment was [in the third quarter]
OPPORTUNITY: After Huawei said it would sell a sub-brand, potentially exempting it from the US ban, the Hsinchu-based chipmaker eyes the chance to boost sales in China MediaTek Inc (聯發科) yesterday became the nation’s second-most valuable listed company after its market capitalization climbed to NT$1.157 trillion (US$40.23 billion) amid investors’ optimism of new business opportunities, while Hon Hai Precision Industry Co (鴻海精密), a major assembler of Apple Inc’s iPhones, fell one notch to third with a market capitalization of NT$1.153 trillion. The increase in MediaTek’s value came as its shares rallied 4.6 percent to close at NT$728 yesterday, as investors expected the handset chip supplier to benefit from Huawei Technologies Co’s (華為) decision to sell its low-to-mid-range smartphone business under the Honor (榮耀) sub-brand. On Tuesday, Huawei announced