Leading provider of Fly-In Fly-Out (FIFO) services National Jet Express (NJE) will be acquired by a freight and charter company for $48 million under a newly signed Sale and Purchase agreement.
Rex has signed the agreement for its subsidiary Rex Freight and Charter (RFC) to acquire 100 per cent of NJE.
NJE is the regional services arm of Cobham Aviation Services Australia, which provides FIFO services in Western Australia and South Australia.
In addition, NJE operates freight services from Sydney to Adelaide, Brisbane, Melbourne and the Gold Coast (Coolangatta), as well as air charter services in Papua New Guinea.
Revenue for NJE in the calendar year 2021 was $142 million.
Rex’s Executive Chairman, Lim Kim Hai, said FIFO services are expected to experience strong growth in Australia and this acquisition positions the Rex Group to participate in this booming sector.
“With this acquisition, Rex will have a FIFO arm that is simply unparalleled in Australia,” Mr Lim said.
“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.
Mr Lim said that NJE’s modern aircraft fleet and its long-term customer relationships overlayed 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,” Mr Lim said.
“The joint venture will invest in modern aircraft and technology to enable NJE to expand from its traditional bases of Western Australia and South Australia and bring our unique brand of FIFO services also to Queensland and Northern Territory.”
The purchase price for the acquisition will be about $48 million, subject to certain adjustments for working capital and other matters.
Rex’s funding will be provided by drawing down an additional $15 million under its convertible note facility with PAG and from its own cash resources to fund 50 per cent of the purchase price.
The remaining 50 per cent of funding will be provided by its joint venture partners, one of whom is Rex’s Chairman, who will be funding their 50 per cent share with private funds.
They have agreed to convert that debt funding to be issued new shares in NJE to reduce Rex’s debt burden, so that ultimately Rex and its joint venture parties will each own 50 per cent of NJE.
Completion of the sale will be subject to regulatory approvals, including Foreign Investment Review Board approval.
It is envisaged that shareholder approval will not be required.
