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

The Regional Express share price is soaring higher today as the company announced an update on its pending foreign investment.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Regional Express Holdings Ltd (ASX: REX) share price is trading close to its 52-week high after an overseas interest gained investment approval today. After an early surge, the Regional Express share price is trading up 1.32%, at $2.31.

This is the latest piece of good news for the regional airline that has seen its share price soar in recent weeks. Brushing aside COVID-19 impacts that largely decimated the travel sector this year, the Regional Express share price is up an astonishing 97% since the start of the year.

What happened today?

This morning, leading Asian investment firm PAG confirmed it had been granted Foreign Investment Review Board approval to acquire an interest in Regional Express.

The approval was sought in relation to a subscription agreement entered into with PAG on 19 November. Shares in Regional Express are up 49% since news of that agreement transpired.

Under the deal, Rex will issue up to $150 million convertible notes to PAG to fund its domestic operations. The notes can be converted to ordinary shares at $1.50, so it's worth noting that PAG could potentially hold up to 47% of Rex's shares if fully converted.

Despite today's good news, other regulatory approvals are still needed. The company is awaiting its high capacity air operator's certificate (HCAOC), and the outcome will likely be known by 18 December. The transaction is also subject to shareholder approval at Regional Express's next AGM.

What now for the Regional Express share price?

The company is Australia's largest independent regional and domestic airline. In exciting news for shareholders, Regional Express recently announced it will be offering flights from Melbourne to Sydney from $79. These flights will begin with 6 planes in March next year.

In addition to the airline, Regional Express comprises wholly owned subsidiaries Pel-Air Aviation and two pilot academies in Wagga Wagga and Ballarat.

Motley Fool contributor Daniel Ewing 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.

More on Share Market News

Unsure man analysing data on laptop.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors endured a rough day of trading this Tuesday.

Read more »

A woman sits in a cafe wearing a polka dotted shirt and holding a latte in one hand while reading something on a laptop that is sitting on the table in front of her
Share Market News

ASX 200 takes the latest RBA interest rate verdict in stride

The ASX 200 looks to have shaken off today’s RBA interest rate call.

Read more »

A mature-aged couple high-five each other as they celebrate a financial win and early retirement
Share Gainers

Why this ASX 300 stock is soaring 12% after a disastrous year

This company has had a dramatic reversal of fortunes this Tuesday...

Read more »

A young woman wearing overalls and a yellow t-shirt kicks one leg in the air showing excitement over the latest ASX 200 shares to hit 52-week highs
Share Gainers

Why Core Lithium, Imugene, Lifestyle Communities, and Mineral Resources shares are charging higher

These shares are having a good session. What's going on?

Read more »

A miner stands in front oh an excavator at a mine site
Broker Notes

Broker says buy the dip on ASX 200 uranium share with 69% upside

Shaw and Partners says this ASX uranium stock is trading at an attractive price point right now.

Read more »

Person with thumbs down and a red sad face poster covering the face.
Share Fallers

Why Domino's, Lynas, Paladin Energy, and St Barbara shares are sinking today

These shares are having a tough session. What's going on?

Read more »

A young woman smiles as she rides a zip line high above the trees.
Share Gainers

4 ASX All Ords shares up 315% to 682% in a year!

Investors have sent these ASX All Ords shares flying higher. But why?

Read more »

Woman on a swing at a beach, symbolising passive income.
Dividend Investing

Overinvested in Fortescue shares? Here are two alternative ASX dividend stocks

Let’s unearth some other passive income opportunities.

Read more »