Rex’s sale to US aviation business cleared for take-off
The postponement of the sale of regional airline Rex to a US buyer paved the way for new ownership to be taken over in December.
More than a year after the cash-strapped airline went into voluntary administration, creditors voted on Tuesday in favor of selling the airline to American aviation investor Air T.
The embattled airline supported the federal government to keep its regional and remote routes operating; The government purchased $50 million of Rex’s debt while also lending $80 million.
The administrators’ announcement did not specify how much return creditors would receive from the sale nor what return any shareholders could expect from the sale.
Rex is no longer listed on the Australian Securities Exchange.
Creditors also voted to liquidate the capital arm of Rex’s business and did not offer to buy Air T.
Rex’s decline was due to its expansion into capital city routes, where it was unable to compete with its larger rivals.
Air T is expected to assume operational control of Rex by mid-December, manager Sam Freeman said.
“We would like to thank all staff who have ensured the uninterrupted continuation of regular passenger services over the past 15 months, our customers who continue to support Rex and the Australian government who have provided extensive support to deliver this outcome,” he said.
The federal government backed Air T’s bid and said the sale was a win for regional communities.
“Air T’s bid has been approved by the government and includes a support package that includes a loan of up to $60 million and a restructuring of existing Australian government debt,” Transport Minister Catherine King said.
“In return for this support, Air T agreed to a number of commitments aimed at preserving essential regional aviation connectivity and improving Rex’s governance arrangements.”
Rex’s regional business flies between 54 Australian airports.
Air T has air cargo, commercial aircraft and ground support equipment businesses.
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