8-K: Air T Nears Rex Acquisition After Creditor Approval

Air T, Inc. announced that a majority of Regional Express Holdings Limited's creditors have voted in favor of its bid to acquire the Australian regional airline.

Summary

• Air T, Inc. received majority approval from Regional Express Holdings Limited (Rex) creditors for its acquisition bid.
• Both in number and in value, Rex's creditors voted in favor of Air T's (and its indirect subsidiary's) proposal at the second meeting of creditors on November 11, 2025.
• Air T anticipates that court and other necessary approvals for the proposed transaction will be secured by calendar year-end 2025.
• The transaction involves Air T's indirect subsidiary acquiring all outstanding capital stock of Rex.
• Further information regarding the acquisition will be provided following the closing, which is expected shortly after court approval.
• The proposed transaction is subject to numerous conditions, including court approval, and there is no assurance it will occur or on the presently expected timing or terms.

Sentiment

Score: 7

Explanation: The sentiment is positive due to the significant progress made in the acquisition process with creditor approval. However, it is tempered by the explicit mention that the transaction is still subject to numerous conditions, including court approval, and there is no absolute assurance of its completion or timing.

Positives

• A majority of Rex's creditors, both in number and value, voted in favor of Air T's acquisition bid, reflecting strong endorsement.
• The company anticipates court and other approvals to occur by calendar year-end 2025, suggesting a clear path forward.
• The acquisition is seen as a commitment to regional aviation in Australia and is expected to benefit Rex and regional communities.

Risks

• Inability to finance operations through bank or other financing or through the sale or issuance of debt or equity securities.
• Economic and industry conditions in the company's markets.
• The risk that contracts with FedEx could be terminated or adversely modified, or the number of aircraft operated for FedEx is reduced.
• The risk that Ground Support Equipment (GGS) customers will defer or reduce significant orders for deicing equipment.
• The impact of any terrorist activities or armed conflict on United States soil or abroad.
• Changes in U.S. and foreign trade regulations and tariffs.
• The company's ability to manage its cost structure for operating expenses, or unanticipated capital requirements, and match them to shifting customer service requirements and production volume levels.
• The company's ability to meet debt service covenants and to refinance existing debt obligations.
• The risk of injury or other damage arising from accidents involving the company's overnight air cargo operations, equipment or parts sold and/or services provided.
• Market acceptance of the company's commercial and military equipment and services.
• Competition from other providers of similar equipment and services.
• Changes in government regulation and technology.
• Changes in the value of marketable securities held as investments.
• Mild winter weather conditions reducing the demand for deicing equipment.
• Market acceptance and operational success of the company's aircraft asset management business and related aircraft capital joint venture.
• The company and its subsidiaries may still be able to incur substantially more debt despite current indebtedness levels, which could further exacerbate risks associated with substantial leverage.
• There is no assurance that the Rex acquisition transaction will occur or occur on the timing or terms presently expected, as it is subject to numerous conditions including court approval.

Future Outlook

Air T presently expects that court and other approvals for the proposed acquisition of Regional Express Holdings Limited (Rex) will occur by calendar year-end 2025, with the transaction closing shortly thereafter. However, the transaction is subject to numerous conditions, and there is no assurance it will occur or on the expected timing or terms.

Management Comments

• "Air T welcomes creditor support for Rex acquisition."
• "This strong endorsement reflects confidence in our vision for Rex and our commitment to regional aviation in Australia."
• "We take our responsibilities under the proposed Deed of Company Arrangement seriously."
• "We are working closely with all parties to ensure a smooth and timely completion."
• "Air T is grateful for the support shown throughout this process and looks forward to finalizing the acquisition and beginning a new chapter for Rex and regional communities across Australia."

Industry Context

This announcement signifies Air T's strategic expansion into the regional aviation sector in Australia through the acquisition of Rex. It reflects a commitment to strengthening its portfolio of businesses, which currently includes overnight air cargo, ground support equipment, commercial aircraft, engines and parts, and digital solutions, by entering an adjacent industry.

Stakeholder Impact

• **Shareholders (Air T):** Potential for increased value and diversification of revenue streams if the acquisition is successfully completed, but also exposure to the risks associated with the transaction and integration.
• **Employees (Rex):** Potential for stability and growth under new ownership, though integration processes may bring changes.
• **Customers (Rex):** Potential for continued or improved regional aviation services in Australia.
• **Regional Communities (Australia):** Continued commitment to regional aviation, which is vital for connectivity and economic activity.
• **Creditors (Rex):** Approval of the bid indicates a favorable outcome for them in the Deed of Company Arrangement process.

Next Steps

• Secure court and other necessary approvals for the Rex acquisition by calendar year-end 2025.
• Finalize the acquisition of Rex shortly following court approval.
• Provide further information about the transaction following its closing.
• Address shareholder questions via Slido.com at the Annual Meeting and quarterly written responses.

Key Dates

Recommendation

The filing provides a positive and expected update on a significant acquisition, clearing a major hurdle with creditor approval. However, the transaction remains conditional on court and other approvals, introducing an element of uncertainty. Without specific financial details of the acquisition's impact on Air T's balance sheet or future earnings, a 'hold' recommendation is prudent. Investors should monitor the finalization of the deal and subsequent financial disclosures before making stronger investment decisions.

Keywords

Air T, Rex, acquisition, regional airline, Australia, aviation, creditor vote, M&A, NASDAQ