It has been announced that the voluntary administrators for Regional Express Holdings Limited (Rex Holdings) will express their intention to apply to the Federal Court of Australia to extend the convening period of the voluntary administration to December of this year.
This development comes in light of Ernst & Young (EY)’s failure to secure a new owner for the regional carrier.
However, authorities have remarked that the sale process is progressing positively, with the administrators having narrowed the bidding field.
It is expected that this will give administrators additional time to secure a market-led solution.
The decision to grant an extension is, nevertheless, a matter for the Federal Court.
What happens now?
According to the statement released earlier today, 17th June: “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 Government continues to work closely with the Administrators during their sale process for Rex. Further details of the bid process cannot be disclosed at this stage due to ongoing negotiations and commercial confidentiality.”
The government is not a buyer
Australian authorities have, nevertheless, made it clear that the government is not a bidder in the sale of Rex Holdings.
Instead, it is merely undertaking necessary work on contingencies should a market-led solution not be achieved.
The statement further declared: “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.”
