Originally Posted by
Colonel_Klink
From Australian Aviation:
GOVERNMENT MAY BUY OUT LARGEST SHARE OF REX DEBT
written by
Jake Nelson December 12, 2024
The Federal Government is reportedly planning to buy out investment firm PAG as Rex’s largest creditor.
...
You have to wonder about the process and mindset that would lead the government to that decision. It is pretty clear that there is no commercial interest in Rex's regional operation, even at the sort of discounted purchase price expected when buying it out of administration. That should speak volumes.
Then there's the matter of dealing with PAG. Two of their directors are already on the hook for allegedly failing to comply with one of the most basic requirements for a publicly traded company in this country, specifically continuous disclosure. Further, there is a lot of murky water around PAG's machinations in the run up to the appointment of administrators, which includes exclusive meetings between PAG and the soon-to-be-appointed administrator, EY.
Frankly, the notion that the government would see to it that PAG walks away from this debacle having been made whole on their investment while other creditors such as regional councils and local service providers are looking at cents on the dollar, is offensive to say the least.
Apparently other regional operators have indicated some interest in taking on some of the routes operated by Rex but they currently lack the capacity to take on the additional work. I don't know why government wouldn't want to support a process whereby routes operated by Rex were parcelled out to some of the other players together with commensurately sized grants and/or low-to-no interest funding as a ramp-up/transition-of-service subsidy. You could probably have all of the centres that were previously serviced by Rex adequately covered by different operators within six months or so.
If nothing else, moving regional aviation away from having one ostensibly too big to fail provider would have to deliver some benefit.