REGIONAL Express (Rex) is likely to take over the lease of the large aircraft hangar formerly operated by Douglas Aerospace.
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The company fell into voluntary administration in May, after Wagga City Council (WWCC) loaned the aircraft refurbishment business $2.5 million in 2012 to build the Forest Hill hangar.
Administrators, Armstrong Wily, confirmed on Friday that Douglas Aerospace had entered into a deed of company arrangement on Thursday and reverted managerial control of the company back to Douglas Clarke.
Whilst in administration, council negotiated with Rex, Douglas Aerospace and its creditors, before agreeing to terms for the proposed lease of the hangar.
At a meeting on July 7, creditors voted in favour of a deed of company agreement (DOCA) that results in the termination of the sub-lease with Douglas Aerospace, the acquisition of the plant and equipment by council for sale to Rex, and distribution of funds held by the administrator to creditors.
This came into effect on Thursday.
Mayor Rod Kendall welcomed the move and said Rex had been a significant driver to Wagga's economic growth.
“This latest involvement by Rex in the aircraft painting and refurbishment business at the airport is further demonstration of the outstanding and unwavering commitment by Rex for our community and we all owe Rex a debt of gratitude for continuing to invest in Wagga,” he said.
“Council’s focus now is to undertake the remaining works necessary at the hangar so that this new venture can realise its true potential of being one of the two most significant aircraft painting facilities in Australia.”
WWCC General manager Phil Pinyon confirmed council received confirmation from the voluntary administrator on Friday.
"The status of the loan will become clear once the announcements are made regarding the commercial arrangements with Rex,” Mr Pinyon said.
Cr Paul Funnell believed it was a step in the right direction.
“Whilst I accept this is the next step in the process, I have grave concerns that I got notified by the media and members of the public before council directly notified the elected body,” he said.
Cr Kerry Pascoe was “annoyed that all councillors … were kept in the dark regarding the dealings that happened yesterday”.
