The Australian government has acquired the debt of struggling telecoms operator Regional Express (Rex), becoming the company's major secured creditor.
Transport Minister Catherine King said the government had obtained a 50 million Australian dollar ($31.4 million) bond from Rex's largest creditor, PAGAC Regulus Holdings, which it described as “to prevent negative impacts on local communities.'' “An important step,” she calls it.
King added on January 23 that taking on Rex's debt “underlines” Canberra's “continued commitment” to maintaining regional air access within the country.
Rex entered government at the end of July due to mounting financial difficulties after expanding into the jet business. The airline's Boeing 737 flights were immediately grounded, but the company continues to operate regional Saab 340 flights after the government agreed to guarantee these services.
Canberra has also provided commercial financing of up to A$80 million to help Rex continue operations and extended flight booking guarantees to enable Rex to continue flying during the extended administration process.
A suitable buyer for Rex's regional operations has not yet emerged.
