On the whole, it's been a great start to the trading week for ASX shares. At the time of writing, the All Ordinaries Index (ASX: XAO) has risen by 0.81% so far this Monday. But this goodwill is not extending to the Regional Express Holdings Ltd (ASX: REX) share price right now.
In fact, Rex stock isn't doing much at all this session.
Investors may have noticed that the airline's shares were not available for trading upon market open this morning.
Just before trading commenced, Rex issued an ASX filing informing investors that trading of its shares would be temporarily paused "pending a further announcement".
Not too long afterwards, Rex expanded on that announcement slightly, stating the following:
Regional Express Holdings Limited (Rex, ASX: REX) requests the securities of the company to be placed in an immediate trading halt pending a material announcement in relation to a news article published on Saturday, 27th July 2024.
Rex advises the trading halt is to last until the commencement of trade on Wednesday, 31st July 2024 or until the announcement mentioned above has been made. Rex confirms that is not aware of any reason why the trading halt should not be granted or of any other information necessary to inform the market about the trading halt.
So that's all we know for sure right now. But there's a lot to unpack here.
Rex share price paused as rumours swirl
It looks as though the "news article" that Rex is referencing might be an article published in The Australian on Saturday.
This article alleges that Rex may have "invited a turnaround team from Deloitte to rifle through its books and try to stop the proverbial plane from crashing into the mountain". This comes after what has reportedly been an unsuccessful attempt to expand into providing flights between Sydney, Melbourne and Brisbane.
The article goes on to allege that "Deloitte's partners are in a fever attempting a restructure solution as a rescue package. That too, we hear, is teetering towards failure".
This is the second trading halt in as many months that the Rex share price has gone through. Back in June, we covered the trading halt that was implemented following the release of some updated financials from the airline.
After initially forecasting an operationally profitable FY2024, Rex revealed that it now expects to book a $35 million loss. The company blamed a "global shortage of pilots and engineers, along with supply chain shocks post-COVID" for that downgrade.
So, we'll have to wait for Rex's response to the article's assertions later this week to find out what's going on. But there's little doubt that Rex shareholders will not welcome these developments.
At the last Rex share price of 56 cents, the company was nursing a year-to-date loss of 22.52%. That's in addition to a 50% cut from where the shares were this time in 2023.
Let's see what happens when the airline returns to trading.
