iscover
Rex’s administrators are applying for another extension to their appointment as the sale process continues.
In a statement, Transport Minister Catherine King said EY Australia would ask the Federal Court to extend its convening period – currently slated to end this month – to December, and indicated further financial support would be provided if the extension is granted.
This content is available exclusively to Australian Aviation members.
A monthly membership is only $5.99 or save with our annual plans.
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Unlimited access to all Australian Aviation digital content
- Access to the Australian Aviation app
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Access to our Behind the Lens photo galleries and other exclusive content
- Daily news updates via our email bulletin
- Unlimited access to all Australian Aviation digital content
- Access to the Australian Aviation app
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Access to our Behind the Lens photo galleries and other exclusive content
- Daily news updates via our email bulletin
The news comes as a bid by Australian consortium Renaissance Partners is understood to have been knocked back by EY, as reported in The Australian.
“The sale process is progressing positively, with the administrators having narrowed the bidding field, and this would allow the administrators additional time to secure a market-led solution. The decision to grant an extension is a matter for the Federal Court,” the minister said.
“If approved, the Albanese Government will continue to assist regional communities in maintaining access to critical aviation during this time by extending the ticket guarantee on regional routes. The existing loan of up to $80 million provided to the administrators – which is yet to be fully expended – would remain available to ensure the airline can continue to operate.
“In order to support the extension, if an application is granted by the Federal Court, additional financing of up to $30 million from the Australian Government to the administrators will also be made available should it be required to keep regional routes in the air until December.”
The minister said the government “continues to work closely with the administrators during their sale process for Rex”, with further details unable to be confirmed due to “ongoing negotiations and commercial confidentiality”.
“The Australian Government is not a bidder in the sale process, but is undertaking necessary work on contingencies should a market-led solution not be achieved,” she said.
“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.
“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.”
The potential nationalisation of Rex, which comes after $80 million in federal funding and the government’s purchase of $50 million in Rex debt from financier PAG, means the airline could become the first to be owned by an Australian government since Qantas was privatised in the 1990s.
Rex entered voluntary administration at the end of July last year, with estimates that it owed around $500 million to 4,800 creditors after its failed venture into competing with Qantas Group and Virgin Australia on domestic jet operations.
The government has since propped up the ailing carrier, including by guaranteeing its regional bookings and preserving its slots at Sydney Airport, but no buyers emerged in the first sale process.
EY Australia declined to comment.
Want to see more stories from trusted news sources?
Make Australian Aviation a preferred news source on Google.
Click here to add Australian Aviation as a preferred news source.
[email protected]
says:I really appreciate the problem here and I also think the market is playing a high stakes game looking for a major hand out from the Fed. Govt. – meanwhile the poor old regional customers have no idea where/when a resolution will be declared. Clearly whilst the Govt continues to drip feed this operation operators will continue to accept that situation and not make a commercial move. I would suggest that if the Airline cannot be sold within 90 days the Govt winds the outfit up and puts the air service routes up for tender. An extension of the existing terms of agreement clearly is not fit for purpose
Justin Bannon
says:I believe they need to stop beating a dead horse here, being REX, and let someone else come in who is already established to service these routes. I know multiple airlines are waiting in the wings. How much more of the Australian taxpayers’ dollars will the administrators pocket… because let’s face it, they will be the only winners here.