Rex today announced that it had signed an agreement with PAG Regulus Holdings Pte Ltd (PAG), a subsidiary of leading Asia-Pacific focused investment firm PAG that will see an investment by PAG of up to AUD150 million to be used exclusively to support the launch of Rex’s domestic jet operations scheduled to commence on 1 March 2021 (Funding).

The Funding comprises first ranking senior secured convertible notes (Notes). An initial Funding tranche of AUD50 million will be drawn down towards early January 2021 (Completion), with the balance of the Funding available for drawdown over the following three years.

The Funding is subject to customary conditions including Rex’s shareholder approval for the purposes of section 611 (Item 7) of the Corporations Act 2001 (Cth) (Corporations Act) and the ASX Listing Rules, which is intended to be sought at Rex’s Annual General Meeting (AGM); as well as to the Foreign Investment Review Board (FIRB) and any other required regulatory approvals.

Upon Completion, PAG will be entitled to nominate two directors to the Rex board.

Leadenhall Corporate Advisory has been appointed as an independent expert to report on whether the Funding transaction is fair and reasonable to Rex's shareholders. This will be included as part of the Notice of Meeting and Explanatory Memorandum to be sent to shareholders to allow them to consider and vote on the Funding transaction, which will occur at the Company's AGM. These documents are expected to be sent to shareholders in early December with the AGM then being in early January.

The Annex outlines the principal terms of the agreement.

Rex’s Executive Chairman, Mr Lim Kim Hai, said, “PAG is a well-respected and highly successful investment group which manages more than USD40 billion on behalf of major global institutional investors. I look forward to tapping into the experience and expertise of PAG’s nominated directors whose professionalism I have grown to respect over the last few months of extensive discussions.”

“Preparations for our domestic operations are proceeding to plan with our first Boeing 737 800NG aircraft delivered on 5 November 2020. Our crew will carry out training on the aircraft over the next 3 weeks before the CASA proving flight on 2 December 2020. We anticipate CASA approval shortly after. Five other similar aircraft will be delivered from next month to March 2021.”

“We will debut on the Sydney – Melbourne route with 3 aircraft on 1 March 2021 and will ramp up to 5 aircraft by Easter that will see flights to other capital cities. Once the initial services are well established, we aim to progressively grow our fleet to cover all the major cities in Australia.”

PAG Chairman and CEO Weijian Shan said, “We have been impressed with Rex’s established track record in regional aviation in Australia. Rex’s plan to provide Australia’s major cities with

affordable and high-quality air travel is consistent with their disciplined and focused approach over the past 18 years. PAG is excited to partner with Rex on this expansion.”