A trading halt has hit Rex Airlines, at least until Wednesday, as speculation grows that the airline will axe its struggling 737 operations amid a major internal crisis among its owners and board members.
The trading halt follows a story published in The Weekend Australian‘s Margin Call column claiming Rex (REX.ASX) had called in a “turnaround team” from Big Four accounting term Deloitte and that the airline has been having trouble turning a profit in its domestic jet operations.
Rex shares last traded at $0.565, having plummeted nearly 50 per cent over the last 12 months. The trading halt has not affected scheduled flights.
According to the news report, Deloitte’s Sal Algeri and Richard Hughes, who helped Virgin recover from voluntary administration, are leading the team.
“The securities of Regional Express Holdings Limited (‘REX’) will be placed in trading halt at the request of REX, pending it releasing an announcement,” the ASX statement said.
“Unless ASX decides otherwise, the securities will remain in trading halt until the earlier of the commencement of normal trading on Wednesday, 31 July 2024 or when the announcement is released to the market.”
In requesting the trading halt, company secretary Richard Kwan said the move was “pending a material announcement in relation to a news article published on Saturday, 27th July 2024”, referring to The Weekend Australian story.
Earlier this month, Rex’s former executive chairman, Lim Kim Hai, launched a bid to remove long-serving leader and former deputy chairman John Sharp from the board.
In a statement to the ASX, Rex said Lim is seeking to remove four directors, including Sharp, and appoint two new ones in his capacity as a shareholder with a more than five per cent stake in the airline group.
Lim had earlier stepped away from his role with both Sharp and COO Neville Howell promoted.
The airline also recently launched a new ad campaign, based on a 67-year-old Hollywood Golden Era movie.
Feature image: One of the Rex Boeing 737s.
