Rex given a clear runway by FIRB for $48m acquisition of National Jet Express

Regional Express Holdings (ASX: REX) has been given a green light to capitalise on Australia’s fly-in-fly-out (FIFO) market after the Foreign Investment Review Board (FIRB) waved through the airline's proposed $48 million acquisition of National Jet Express.

However, the tick of approval hasn’t quelled rumours that the private-equity-owned Virgin Australia is looking to swallow the listed airline.

The FIRB today issued a ‘no objection’ notice for Rex’s takeover of the regional services arm of Adelaide-based Cobham, a specialist aviation group that also operates aerial border surveillance and search-and-rescue operations.

Rex, which had already received approval from the Australian Competition and Consumer Commission (ACCC) for the buyout in July, was required to seek FIRB approval due to a significant shareholding in the company by Singapore-based PAGAC Regulus Holding Pte Ltd (PAG).

PAG is eligible to a 47 per cent shareholding in Rex following a $150 million issue of convertible notes in the airline in 2020.

Approval from the FIRB now sets Rex on course to complete the National Jet Express acquisition on 30 September 2022.

National Jet Express, which delivered revenue of $142 million in calendar 2021, operates FIFO services in Western Australia and South Australia, as well as freight services from Sydney to Adelaide, Brisbane, Melbourne and the Gold Coast, and air charter services in Papua New Guinea.

Meanwhile, accompanying today’s ASX announcement, Rex reiterated its response issued last Friday to ongoing media speculation surrounding a potential takeover by Virgin.

“Rex does not comment on market speculation or rumours,” the company says.

“It is up to Virgin to comment on this matter.”

Rex is Australia’s largest independent regional and domestic airline with a fleet of 61 Saab 340 and seven Boeing 737-800NG aircraft servicing 58 destinations across Australia, while Virgin is owned by Bain Capital following a $3.5 billion acquisition from voluntary administrators in 2020.