Regional Express Holdings has announced it is acquiring Cobham Aviation Services Australia - Regional (Adelaide International) from Cobham Group for around AUD48 million Australian dollars (USD32.6 million).

In a statement, the firm said its Rex Freight and Charter Pty Ltd (RFC) subsidiary would acquire 100% of National Jet Express Pty Ltd (NJE) by drawing down an additional AUD15 million (USD10.2 million) under its convertible note facility with PAG Regulus Holdings Pte Ltd. and from its own cash resources to fund 50% of the purchase price. The remaining 50% will come from its joint venture partners, one of whom is Rex's chairman, who will be funding their 50% share with private funds. They are said to have agreed to convert that debt funding to be issued with new shares in NJE to reduce Rex's debt burden, so that ultimately Rex and its joint venture partners will each own 50% of NJE.

For its part, NJE provides Fly-In Fly-Out (FIFO) services in Western Australia and South Australia, and also operates freight services from Sydney Kingsford Smith to Adelaide International, Brisbane International, Melbourne Tullamarine, and the Gold Coast Coolangatta, as well as air charter services in Papua New Guinea. Its fleet entails four BAe 146-300(QT)s, eight DHC-8-Q400s, and six E190s. For its part, Regional Express Holdings' Pel-Air Aviation (PFY, Sydney Kingsford Smith) subsidiary, which is owned by RFC, operates 18 in house aircraft including three Saab 340A(F)s (for Qantas Freight) as well as Israel Aerospace Industries Westwind 1124s and Beech (twin turboprop) King Airs. It also has access to over fifty Saab (Sweden) turboprops operated by sister carrier Rex - Regional Express (ZL, Wagga Wagga).

“FIFO services are expected to experience strong growth in Australia and this acquisition positions the Rex Group to participate in this booming sector,” Rex’s executive chairman, Lim Kim Hai, said. “With this acquisition, Rex will have a FIFO arm that is simply unparalleled in Australia. NJE has a completely modern fleet comprising eight Bombardier Q400 turboprops and six Embraer E190 jets for FIFO work. Both aircraft types are fuel efficient, have enhanced operational reliability and low carbon emissions when compared with the predominantly 40-year-old Fokker 100s used by the other major FIFO operators [i.e Network Aviation, Virgin Australia Regional, Skippers Aviation, and Alliance Airlines].”

“I believe that NJE’s modern aircraft fleet and its long-term customer relationships overlaid with Rex’s proven record of safety, reliability and cost efficiencies would propel NJE to be the premier FIFO operator in Australia. NJE will naturally be the partner of choice for resource companies all over Australia who have been crying out for so long for a FIFO provider that is able to address their triple priorities of minimal impact on the environment, comfort and safety of its staff and reliability of service. The joint venture will invest in modern aircraft and technology to enable NJE to expand from its traditional bases of WA and SA and bring our unique brand of FIFO services also to Queensland and Northern Territory.”

Completion of the sale will be subject to regulatory approvals, including Foreign Investment Review Board (FIRB) approval. Shareholder approval is not expected to be required.