Why the Regional Express (ASX:REX) share price is flying high today

The Regional Express Holdings Ltd (ASX:REX) share price was a strong performer on Tuesday. Here’s what you need to know…
The post Why the Regional Express (ASX:REX) share price is flying high today appeared first on The Motley Fool Australia. –

jet plane representing flight centre share price about to take off on runway

The Regional Express Holdings Ltd (ASX: REX) share price was a very positive performer on Tuesday.

The regional airline operator’s shares rose 4% to $1.69.

This latest gain means the Regional Express share price has now more than doubled over the last 12 months.

Why did the Regional Express share price storm higher?

Investors were buying Regional Express shares on Tuesday following the release of an update on its agreement with PAG Regulus.

According to the release, the company has completed its investment transaction with PAG Regulus to raise up to $150 million to be used exclusively to fund its domestic operations.

The first tranche of $50 million has been drawn down and secured convertible notes have now been issued to PAG Regulus. The remaining $100 million of the funding will be available for drawdown over the following three years.

What is the funding for?

The funding from the deal with PAG Regulus will be used to support the launch of Rex’s domestic jet operations. These are aiming to compete with Qantas Airways Limited (ASX: QAN) and Virgin Australia on some major routes.

In November Regional Express announced the agreement with PAG Regulus. At the time, Rex’s Executive Chairman, Lim Kim Hai, explained the rationale for the deal.

He 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.”

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Regional Express (ASX:REX) share price is flying high today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!