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A New York-based distressed-debt investor is among the bidders reportedly looking to buy Rex as the airline’s sale deadline looms.
The Australian Financial Review has reported that Anchorage Capital Advisors, which has in the past recapitalised businesses such as Slater & Gordon and Alinta Energy, was among the firms that bid on Rex before binding offers closed last week.
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The sale process, run by administrator Ernst and Young (EY) Australia, officially ends on 30 June, with the winning bidder expected to be announced “within weeks” according to the Financial Review. Bidders have been negotiating directly with the federal government as the airline’s largest secured creditor.
Another firm rumoured to have been interested is WA-based HMC Group, which owns regional carrier Nexus Airlines, though the Financial Review could not say if it had submitted its own offer.
It is unclear whether any further extensions will be needed to complete the sale, and the government has previously suggested it could step in and purchase Rex itself should the second process bear no fruit.
The potential nationalisation of Rex, which comes after $80 million in federal funding and the government’s purchase of $50 million in Rex debt from financier PAG, means the airline could become the first to be owned by an Australian government since Qantas was privatised in the 1990s.
Rex entered voluntary administration at the end of July last year, with estimates that it owed around $500 million to 4,800 creditors after its failed venture into competing with Qantas Group and Virgin Australia on domestic jet operations.
The government has since propped up the ailing carrier, including by guaranteeing its regional bookings and preserving its slots at Sydney Airport, but no buyers emerged in the first sale process.
“What we’ve said from day one is that we want to see the administration process go through in its entirety. What we want to see is a private buyer come through,” said Regional Development Minister Kristy McBain in February.
“We’ve made sure that there are incentives in place for that to take place, including the fact that the use-it-or-lose-it process for Sydney airport slots doesn’t automatically go into recession. We’ve extended that out to 2026. Those are the things that are important to buyers.
“What we’ve said is we would be a buyer of last resort. We’re not stepping in now. We’re not substituting the administration process. It’s still got a way to run, and the administrator is keen to work with the private market on it.”
EY Australia has sold aeromedical division Pel-Air to Japan-owned Toll Aviation and was in November reportedly looking to sell Rex’s flight school in Wagga Wagga, while FIFO airline National Jet Express has been snapped up by former Rex executive chairman Lim Kim Hai.
Nexus Airlines and EY Australia have been contacted for comment.
