Rex accepts $30m govt financing as administration period extended
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The news: Rex has agreed with the Commonwealth government to receive an additional $30 million in financing as the federal court extends the regional airline operator's voluntary administration period.
The numbers: Initially flagged on 17 June, the Commonwealth government amended its facility agreement with Rex to provide further financing of up to $30 million if required to keep regional routes flying until December.
This takes the total government financing to $160 million. So far the Albanese government has provided an $80 million loan and bought $50 million worth of debt from creditor PAG Capital.
The context: On Tuesday, the Federal Court accepted an extension request by Rex’s EY administrators to delay the convening of the second meeting of creditors by about three months to 5 December, allowing more time to negotiate with potential buyers.
When the federal government’s support was initially flagged last week Transport Minister Catherine King the sale process is “progressing positively” and that administrators have “narrowed the bidding field”.
At the meeting, creditors will vote on the future of the company, which could include returning control to shareholders, executing a deed of company arrangement, ending the administration or winding up the company.
The company entered administration after the airline’s fleet was grounded after it was unable to pay bills.
The sources: ASX, Federal Court of Australia decision
