More turbulence for Rex Airlines as it enters a trading halt following reports of financial strife
Besieged carrier Rex Airlines is facing more turbulence with the temporary suspension of its shares on the Australian Securities Exchange following reports it had called in financial services firm Deloitte.
Rex — or Regional Express Holdings — on Monday requested shares be placed in an immediate trading halt pending a material announcement to the ASX relating a news article published over the weekend.
The article appeared in The Australian’s Margin Call column, which reported tensions among Rex’s directors and the appointment of a “turnaround team” from Deloitte to save the Sydney-based lower-cost carrier from going under.
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By continuing you agree to our Terms and Privacy Policy.“Rex advises the trading halt is to last until the commencement of trade on Wednesday, 31st July 2024 or until the announcement mentioned above has been made,” Rex said in a statement on Monday.
“Rex confirms that is not aware of any reason why the trading halt should not be granted or of any other information necessary to inform the market about the trading halt.”
The regional carrier has not been able to return a profit since the COVID-19 pandemic and there are fears it could suffer a similar fate to the now-collapsed budget airline Bonza.
The Transport Workers Union on Monday appeared to confirm the appointment of Deloitte, vowing to again work with the financial services firm to attempt to rescue Rex as it did with Virgin Airlines.
“Following complaints against Qantas of capacity dumping, slot hoarding and a bidding war in regional Australia, Rex has now become another victim of an unregulated aviation market,” TWU national secretary Michael Kaine said.
“The TWU worked with Deloitte to get Virgin Australia back in the air and will work just as hard with them again to try to rescue Rex Airlines.
“Despite multibillion-dollar Qantas claiming there’s no room for competition, we know healthy competition is the only remedy for an industry in crisis.”
It comes after former Rex executive chair Lim Kim Hai earlier this month launched a bid to remove long-serving leader and former deputy chair John Sharp from the board.
In a July 12 statement, Rex said Mr Lim was seeking to remove four directors, including Mr Sharp, and appoint two new ones in his capacity as a shareholder with over a 5 per cent stake in the company.
