The federal government has today announced it will acquire $50 million of debt from Rex’s largest creditor, PAGAC Regulus Holdings Limited (PAG).
By acquiring the debt, the government says it will become the principal secured creditor and will seek to become a voting member of the Committee of Inspection.
Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King has labelled the acquisition as key to preventing adverse outcomes for regional communities and ensure the continued connectivity of Australia’s regional and remote communities.
“This announcement builds on previous action, including the Albanese Government providing a commercial loan of up to $80 million to the Administrators to keep Rex’s vital regional routes operating, granting early access to former employees of Rex Airlines Ltd to the Fair Entitlements Guarantee, and providing a guarantee in relation to regional ticket sales during the voluntary administration” King says.
“Whilst the accelerated initial sale process undertaken by the Administrators in mid-2024 did not find a suitable buyer for the airlines’ regional operations, the government continues to work closely with the Administrators through the extended convening period.
“These actions preserve important economic, medical and freight services, supporting regional liveability and regional economies.”
Rex Group closed 2024 with the sale of its air ambulance arm, Pel-Air, to Toll Holdings Limited for a reported $47 million, which was largely put towards the paying down of debts.
When it was sold, Pel-Air’s services were currently under 10-year contract terms with the NSW and Victorian governments, with the business ringfenced against Rex’s administration.
Regional Express Holdings entered voluntary administration in July 2024 after registering huge losses on its routes between major Australian cities, where it had expanded in the hopes of competing with the likes of Qantas and Virgin Australia.
The government stepped in to guarantee the continuation of the company’s regional routes, as 21 of the 41 routes serviced by the Regional Express were operated by no other company.
Read more ATN:
Linfox celebrates new class of graduates
Daimler global sales numbers revealed
Healthy Heads releases healthy eating guide