Pel-Air proceeds to repay secured debts: Transport Minister Catherine King
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More news: Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King has encouraged Australians to continue their patronage of Rex's regional operations following the announcement of the sale of the airline's Pel-Air to Toll Aviation's Helicorp. She said proceeds of the $47.1 million sale will be used to repay secured debts.
King said her department meets daily with the Rex's administrators and she would provide further updates during the ongoing voluntary administration period.
What they said: "Pel-Air is the contractor supplying ambulance services to Ambulance Victoria and NSW Ambulance, along with specially-modified aircraft for international and domestic aeromedical transfers," King said in a statement.
"This is part of the ongoing administration process and proceeds from the sale will be used by the Rex Group to repay secured debt," she said.
"The Commonwealth continues to work closely with the administrators as Rex’s regional aviation business remains in voluntary administration. We have made clear our commitment to support Regional Aviation in Australia and the ongoing viability of key regional services.
"The Commonwealth continues to guarantee ticket sales throughout the Voluntary Administration and we are pleased that Australians have confidence booking flights as bookings are holding up well.
"I encourage passengers to continue to support Rex’s regional operations," she said.
Rex Airlines divests Pel-Air ambulance business
The news: Rex Airlines have agreed to sell its Pel-Air ambulance business and its associated debt to repay secured debt.
The numbers: The sale to an entity owned by Toll Holdings will amount to an expected cash consideration of about $47.1 million, subject to regulatory approvals from Australia’s Foreign Investment Review board.
The context: The lossmaking Rex entered voluntary administration in July after struggling in a price war which led to a 34% drop in its share price.
Administrators Ernst & Young said the process would resolve the company's future by either securing a rescue deal or finding the best result for creditors. Westpac and PAG would also play a central role in negotiations.
In August, the Australian government said it would guarantee all regional Rex flight bookings while the airline went through the voluntary administration process.
The source: ASX announcement
