In a crucial move, the administrators of Rex have announced their intention to seek an extension of the voluntary administration until June 30, 2025. This effort is bolstered by the Australian Government’s substantial $80 million financing facility, which stands as a pillar of support for the extension request.
The extension aims to secure a stable commercial future for the regional airline, allowing former employees to receive their entitlements or immediate access to the Federal Government’s Fair Entitlements Guarantee.
Samuel Freeman, Justin Walsh, and Adam Nikitins of Ernst & Young Australia (EY Australia) are at the helm as Joint and Several Voluntary Administrators for Regional Express Holdings Limited and its subsidiaries, collectively known as the “Rex Group”.
Government Backing
In a significant development today, the Australian Government announced an $80 million financing facility to support the Rex network. EY partner Sam Freeman expressed gratitude to Minister Catherine King for her unwavering support for regional Australia, emphasising how the financing facility will bolster Rex’s services to regional communities.
“This Australian Government financing facility will enable us to continue to support regional communities through an extension of the voluntary administration,” said Freeman.
The Hon Catherine King MP, the Federal Minister for Infrastructure, Transport and Regional Development, said: "Today’s announcement is another demonstration of our commitment to maintaining regional aviation access, recognising the important role that Rex plays in regional communities right across Australia.
"My department continues to meet regularly with the administrators as they work to implement a strategy for the regional aviation business.
“I encourage passengers to continue to support Rex’s regional operations.”
Investing in Regional Growth
The extension and financing are slated to fund a comprehensive business improvement program. This includes a significant investment in Rex’s business performance, targeting an increase in operational aircraft.
“The extension we are requesting will help us to build a strong network for regional Australia, enabling us to continue to operate the regional network while undertaking a business improvement plan to reposition the business for sale,” Freeman elaborated.
Sales and Strategy
The Rex Group has successfully sold its wholly owned aeromedical subsidiary, Pel-Air, and other non-core assets through a competitive process. These sales have secured returns for protected creditors, with ongoing asset sales.
The immediate focus remains on implementing the business improvement plan, aiming to deliver increased returns for creditors and maintain essential services for regions reliant on Rex.
Commitment to Employees and Communities
Former employees of Rex Airlines Pty Ltd are set to receive their Fair Entitlements Guarantee distributions. Both Rex’s administrators and secured creditor PAG have confirmed their commitment to paying the entitlements of former employees made redundant during the voluntary administration period.
Freeman reiterated the commitment to regional and remote communities, stating, “An extension will not disrupt the continued operation of the regional network, which is such a critical part of regional and rural Australia’s connectivity. The actions to be undertaken in the extension period are expected to enhance the network.”
In conclusion, Freeman thanked the dedicated customers, Rex team members, the Australian Government, merchants, and suppliers for their overwhelming support, making this possible.