Shareholders of Tigerair have given the green light for the budget carrier to sell its entire stake in its loss-making Philippine unit.
The company announced in a statement to the Singapore Exchange on March 10 that an extraordinary general meeting (EGM) held on the same day had passed the resolution to sell its 40 per cent interest in Tigerair Philippines.
It said in January that it's selling the stake to Philippine carrier Cebu Air for US$7 million or about $8.9 million then.
Tigerair estimated a net loss on the disposal of $30.3 million in its presentation to shareholders at the EGM.
It said the estimated loss on disposal takes into account the amount needed to settle Tigerair Philippines' liabilities, impairment loss, forward sales and transaction costs.
Tigerair chairman J.Y. Pillay said at the EGM: "From the outset eighteen months ago the venture faced hurdles, first in securing slots at Manila's Ninoy Aquino Airport.
"Then, gaining traction in the Philippines market with a relatively small fleet of five aircraft was problematic. Rapid expansion was not possible because of our stretched resources."
But he added that Tigerair would benefit from a strategic alliance with Cebu Air.
As part of the deal, Tigerair and Cebu Air will work together to penetrate the Philippines market.
They will collaborate in areas like enhancing network coverage, flight frequencies and co-branding initiatives.
Tigerair shares closed a cent lower on Monday at 40 cents.