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A dark-horse bidder for Rex has hit back at the idea that its proposal is “complex” and “not credible”, arguing it is a responsible solution for the airline.
Sydney-based Renaissance Partners, which would establish Darwin and Canberra hubs for Rex as part of its ambition to build a restored TAA as “Australia’s third airline”, was knocked back a second time by administrator EY Australia earlier this month.
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Andrew Cochrane, chief executive of the consortium, rejected the view that Renaissance’s bid is not a “serious” proposal for Rex as EY Australia seeks another extension to its convening period.
“It has been suggested that our proposal is ‘complex,’ that it’s ‘not credible’ or implied that it is not ‘serious’. For clarity, it is none of these things – it is simple, credible and serious – moreover it is responsible,” he told Australian Aviation.
“Personally, I find such comments misguided and a little offensive – not just to us, but to our backers and all Australian and regional communities depending on a committed, long term, and sustainable solution.
“It is also curious given the administrators’ capability assessment confirmed Renaissance to have the capacity to own and operate an airline.”
According to Cochrane, Renaissance has “worked extraordinarily hard to create a proposal that ensures we support every level of stakeholder”, including secured and unsecured creditors as well as Rex’s employees.
“Our proposal also supports regional communities, maintaining all services and destinations whilst expanding regional connectivity and enhancing flight frequencies to underserved areas and more,” he said.
“We even support existing shareholders who are normally entirely wiped out. We believe the Renaissance bid to be the most compelling and responsible of offers for Rex and it is appropriate (we believe essential) that creditors should see it and make their decision accordingly.
“It is also interesting to note that in over 90 per cent of Australian voluntary administrations since 2015, unsecured creditors have received zero cents in the dollar.
“This is the last thing we want to see and, as noted above, we have worked incredibly hard to create an offer where this is not the case, alongside supporting all stakeholders.”
Cochrane also indicated he would not give up on his goal of getting the Renaissance proposal before key creditors and stakeholders.
“For Renaissance, Rex provides a readymade platform towards our larger vision and future made in Australia,” he said.
“Whilst Rex may not be essential to this, there is a logical alignment, whilst being very good for all levels of Rex stakeholder, and we want the creditors and the stakeholders to know this and decide.”
The federal government has previously indicated it would look into purchasing Rex itself if the current sale process falls through, making it the first nationalised airline in Australia since the privatisation of Qantas in the 1990s.
At a press conference on Friday, Transport Minister Catherine King said the sale is “progressing positively” and that EY simply needs more time to complete it.
“It’s unusual for a government to engage itself in an administration of what is a private company, but we know how important Rex is to regional aviation,” she said.
“In some areas, it is the only airline that actually flies in to a community, and so we have stepped in to assist in the administration to get an outcome.
“Our preference has always been for a commercial outcome, and that’s what the administration is aimed to.
“But we have clearly said, if that is not able to be delivered, we will then step in, but we’re still in the process of the voluntary administration and seeking a commercial outcome at the moment.”
EY Australia has sold its aeromedical division, Pel-Air, to Japan-owned Toll Aviation and was in November reportedly looking to sell Rex’s flight school in Wagga Wagga. FIFO airline National Jet Express has been snapped up by former Rex executive chairman Lim Kim Hai.
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says:“Renaissance” certainly have the marketing talk with flowering hope covering all bases but, with respect, where is the detail? E.Y. were certainly correct in dismissing their application.