Embattled regional airline Rex will offload a business providing air-ambulance services in two states in a bid to free up tens of millions of dollars to pay down debts, pending approval.
The airline's administrators announced the agreement to sell Pel-Air to an entity of Japan Post-owned Toll Holdings for about $47 million on Thursday afternoon.
The sale will require approval from the Foreign Investment Review Board and is expected to occur before the end of 2024.
"Proceeds from the sale will be used by the Rex Group to repay secured debt," administrators announced to the share market.
Rex remains suspended from trade with EY administrators in place.
The federal government was working with the regional aviation company's administrators and was committed to ensuring key regional services continued by guaranteeing ticket sales, Transport Minister Catherine King said.
"We are pleased that Australians have confidence booking flights as bookings are holding up well,'' she said.
The Pel-Air business provides air-ambulance services to Victoria and NSW.
An Ambulance Victoria spokesperson told AAP air-ambulance operations would continue to respond to healthcare needs across the state.
Rex administrators secured an extension in court to November 25 as their initial administration period approached its end in August.
The airline returns to court on Friday for judgment in a lawsuit from a US-based aircraft leasing and maintenance company, accusing it of stripping jets for parts without paying for them.
Rex halted trade in its shares at the end of July before entering voluntary administration after consecutive multimillion-dollar losses as it struggled for profitability after expanding in 2021 to compete on capital-city routes against Qantas and Virgin Australia.
