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Virgin Australia Holdings receives nod from shareholders for Tiger Australia

Last updated: 11:40 01 Feb 2013 AEDT, First published: 10:40 01 Feb 2013 AEDT

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Virgin Australia Holdings (ASX: VAH) has taken another step towards increasing its share of the Australian domestic flights pie with its receiving approval for its proposed acquisition of a 60% stake in Tiger Airways Australia.

Tiger Airways Holdings' (SGX: TGR) shareholders approved the formation of the joint venture with Virgin Australia, which is still subject to conditions and regulatory approvals, including Foreign Investment Review Board approval and Australian Competition and Consumer Commission (ACCC) approval.

Virgin will pay A$35 million for the stake in Tiger Australia which has also agreed to pay $5 million to Tiger Airways on achieving certain financial targets within five years.

Virgin and Tiger Airways have also committed to invest up to a further $62.5 million collectively into the business to fund growth in Tiger Australia. The joint venture has flexibility to grow Tiger Australia’s fleet to 35 aircraft form 11 by 2018.

The new joint venture provides Virgin Australia with a low cost platform to re-enter and compete in the budget leisure segment.

Virgin had yesterday received ACCC approval for its acquisition of Western Australia focused Skywest Airlines (ASX: SXR).

 

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