Rex administrators seek further extension as sale process progresses ‘positively’

Transport Minister Catherine King has confirmed ‘positive progress of Rex sale process’, but says administrators need more time.

Transport Minister Catherine King has confirmed the sale of Rex is progressing positively but says administrators need another six months, and the government will provide a further $30m in support to help out.

As reported by The Australian on Tuesday, administrators EY are considering several serious offers for the regional airline and its ageing fleet of Saab 340s, which fly to rural and remote parts of the country.

Ms King confirmed late Tuesday that the “bidding field had narrowed” and an extension of the 11-month-old administration would allow time to secure a market-led solution.

She said it would be up to the Federal Court whether to grant an extension to December, and if approved, the government would provide further financing of up to $30m.

Already the Albanese government has provided an $80m loan, and bought $50m worth of debt from major creditor PAG Capital to prevent the firm from liquidating Rex.

“The government continues to work closely with the administrators during their sale process for Rex,” said Ms King.

“Further details of the bid process cannot be disclosed at this stage due to ongoing negotiations and commercial confidentiality.”

After almost a year in administration, it’s now looking more likely a buyer will be found for Rex.

She said the government was not a bidder in the sale process but was undertaking necessary work on contingencies should a market-led solution not be achieved.

“Any potential government support for a successful bidder will be conditional on commitments to provide an ongoing, reasonable level of service to regional and remote communities, the need to provide value for money to taxpayers and good governance,” Ms King said.

“The Albanese government remains committed to maintaining access to aviation services for regional and remote communities that are essential to their health, education and economic outcomes, and we recognise the critical role of the Rex network to local economies.”

Administrators were appointed to Rex in late July last year, after the airline was unable to pay its bills, leading to the carrier’s 737 operations being grounded.

Since that time, various parts of the company have been sold off, including aeromedical business Pel-Air, a 50 per cent stake in National Jet Express and a flight simulator.

The first sale process run by EY for the regional airline failed to attract any serious bids but it’s believed multiple offers have been made the second time around, including a number that are considered “credible”.

Among those believed to be interested are Sydney’s Anchorage Capital Partners and West Australian regional airline Nexus.

Renaissance Partners made its offer for Rex public in the hope of encouraging EY to put the bid before creditors.

However it’s understood the proposal to keep Rex a publicly listed company and relocate the airline to Canberra was not considered credible by administrators, and ruled out.

Separate to the administration process, the Australian Securities and Investments Commission is pursuing former directors Lim Kim Hai, John Sharp, Lincoln Pan and Siddarth Khotkar in court, over allegations of deceptive and misleading conduct.

The matter is continuing before the New South Wales Supreme Court.

Originally published as Rex administrators seek further extension as sale process progresses ‘positively’