There is fresh hope for troubled regional carrier Rex Airlines, with the company’s administrators revealing to a court there are tentative buy offers in the pipeline for the airline.
At a Federal Court hearing before Justice Elizabeth Cheeseman on Friday, legal representatives for Rex’s administrators asked the court to grant an extension in the convening process as potential investors trawl through the company’s confidential data in preparation for possible bids.
Rex entered administration on July 30, with administrators from Ernst and Young appointed to take control of the firm.
It is understood Rex entered administration with $500m in debt.
On Friday the court was told the company had 4800 non-customer creditors and there was “no prospect” the company could be returned to directors without some form of a restructure.
There are also “contingent creditors”, or customers whose flights evaporated after the airline fell into administration.
A sale process is now underway, the court was told, with non-indicative offers set to be provided to administrators.
Binding offers could arrive by mid September, the court was told, and administrators asked Justice Cheeseman to extend the convening period to November 25 to allow for those offers to be received and processed.
Justice Cheeseman granted the request in an order delivered on Friday afternoon.
The administrators, in a statement following the order, said the time extension would help them ensure the sales process was “comprehensive and competitive”.
“It is our view that a comprehensive and competitive sales process will secure the highest possible value for the Rex Companies and through securing the highest value for the companies, that will ensure the highest possible return for creditors,” they said.
“We have considered the interests of creditors as a whole in securing this extension, including current employees and suppliers who continue to trade with the Rex Companies, who would be adversely impacted if the company was to be wound up, and the dedicated customers who rely on the Rex regional network.
“Through this period, the administrators intend to continue the normal trading of the large part of the business, including the regional Saab network.
“This application does not affect companies that are not in administration, including Pel-Air and the Australian Airline Pilot Academy, which continue to trade normally.
“We plan to convene the second meeting of creditors as soon as possible completion of the sales process.
“We expect to provide creditors with a more detailed update as to what portion of the requested extension is required in the next fortnight.”
NewsWire understands the administrators do not intend to use up the full three months to achieve a resolution.
Parts of Rex continue to trade and the company has some 1000 employees, but the administrators have axed hundreds of jobs.