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A Rex purchase looks to be all but assured, with American firm Air T poised to buy the regional carrier, according to reports in The Sydney Morning Herald.
The Herald has reported that “sources with knowledge of the deal”, who cannot speak publicly, said the announcement – alongside the terms of the buyout – could be made as early as this week after Air T agreed to the deal first rumoured to be in the works last month.
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If it goes through, the purchase would end a voluntary administration that has been in place for more than a year and allow Rex to return to commercial hands, avoiding a government takeover.
According to the Herald, Air T has access to parts needed for the upkeep of Rex’s ageing Saab 340 fleet, which was in the spotlight recently following two engine malfunctions in the span of less than a week.
The Nasdaq-listed company is the owner of Kingman Airport in Arizona, which is where Rex had allegedly stolen four Saab planes from leasing and maintenance firm, Jet Midwest, and stripped them for parts.
While the lawsuit by Jet Midwest, filed post-administration, has been dismissed, The Australian Financial Review speculated that this was where Rex had first entered Air T’s radar.
On its website, Air T, the business arms of which include aircraft trading, aircraft leasing, parts, and freight operations, bills itself as “an industrious American company with a networked portfolio of powerful businesses, each who operate independently yet interrelatedly”.
“We seek to invest in dynamic, talented individuals and teams; insightful doers in their business domains. We apply corporate resources to activate growth and overcome challenges – ultimately building great enterprises that flourish by ‘win-winning’ over the long-term,” it reads.
“Currently we are organised by 4 core business segments consisting of 16 businesses that span a variety of industries, employing over 500 team members nationwide.”
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.
EY Australia was earlier this year given until 5 December to wrap up the second sale process, which was slated to end on 30 June. It is the second extension to the administration period.
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says:Looks like the only chance for REX at this stage but the facts are that Air T will have to re-equip in the short to mid term; – not out of the woods yet