Regional airline Rex’s sale to a US buyer has been ticked off, paving the way for new ownership to take over as soon as December.
More than a year after the cash-strapped carrier went into voluntary administration, creditors voted in favour of the airline’s sale to American aviation investor Air T on Tuesday.
The embattled airline has been propped up the federal government since so its regional and remote routes could keep operating, the government having bought $50 million of Rex’s debt while also lending it $80 million.
The administrators’ announcement did not indicate what return creditors would receive from the sale, nor any return shareholders could expect to see from the sale.
Rex is no longer listed on the Australian Securities Exchange.
Creditors also voted to liquidate the capital city arm of Rex’s business, with Air T not proposing to buy it.
Rex’s downfall was driven by its expansion into capital city routes, where it failed to compete with its major rivals.
Administrator Sam Freeman said Air T was expected to assume operational control of Rex by mid-December.
“We wish to thank all of the staff who have ensured the seamless continuation of regular passenger services over the past 15 months, customers who have continued to support Rex … and the Australian government who have provided extensive support to enable 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 was endorsed by the government and includes a support package comprising a loan of up to $60 million and a restructuring of existing Australian government debt,” Transport Minister Catherine King said.
“In exchange for this support, Air T has agreed to a range 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 owns air cargo, commercial aircraft and ground support equipment businesses.