Domestic services between Sydney, Melbourne and Brisbane to launch in March 2021.
Regional Express Holdings has just confirmed the signing of a term sheet and “advanced exclusive negotiations” with PAG Asia Capital regarding an investment of up to $150 million to support the airline’s launch of domestic major city jet operations.
The funding deal will comprise senior secured notes, with an initial $50 million to be drawn down in December and the balance taken over the following three years.
The notes will be convertible at $1.50 per share, meaning that if the initial tranche is fully converted into shares PAG would hold approximately 23% of the airline, or 48% if the full $150 million is drawn down and converted.
PAG will be entitled to nominate two directors to the Rex board, with the airline’s Executive Chairman, Lim Kim Hai, saying he was encouraged by the progress of negotiations today “with an investor of PAG’s reputation and experience,” with PAG currently managing over US$40 billion on behalf of major global institutional investors.
“With PAG’s support I have every reason to believe that Rex can successfully launch its domestic major city jet operations,” he said.
More details in today’s issue of Travel Daily.