Rex Group will look to wipe out a significant portion of its mounting secured debt through the sale of its Pel-Air Ambulance for more than $47 million (TD breaking news yesterday).
According to an update to the ASX, “certain members” of the struggling aviation business have entered into an agreement to sell the profitable arm to an entity owned by Toll Holdings.
Pel-Air has been a strongperforming arm of the Rex business, having secured a 12year contract with Ambulance Victoria worth over $300 million in 2022, as well as strong revenue injections from contracts with NSW Ambulance in recent years.
Reflecting on the news of the potential divestment, Federal Transport Minister, Catherine King, said it was important passengers continued to patronise Rex’s operations, despite the prospect of a sale.
“The Commonwealth continues to guarantee ticket sales throughout the Voluntary Administration and we are pleased that Australians have confidence booking flights as bookings are holding up well,” King said. “My department continues to meet daily with the administrator and we will provide any relevant updates as the voluntary administration period continues.”
In Aug, the Federal Government announced it would step in and protect bookings made on Rex flights during the administration period in instances of cancellation and rescheduling.
The transaction is subject to regulatory approvals by the Foreign Investment Review Board, and if the sale passes all approvals, it is expected to be settled in Q4 of this year.
