☕️ Taxpayer wings

Good morning.

The Rex Airlines saga deepens as the AFR reports taxpayers will replace distressed debt investor PAG Asia, as the airline’s largest creditor, giving the government control over its future.

We are wondering how much of the $141 million PAG reportedly lent the airline before its collapse the firm has managed to recover as part of the deal.

The timing is contentious. The deal comes just weeks after the government handed Rex an $80 million “conditional loan” to keep regional routes in the air and as ASIC sues four directors, including two from PAG, for allegedly misleading investors about Rex’s finances.

ASIC’s allegations accuse the company – led by former executive chair Lim Kim Hai – of pushing “optimistic” profit guidance without a reasonable basis or even a financial forecast for FY23. With its city routes grounded, workers unpaid, a court case and an election ahead, Rex’s survival now hinges on taxpayer support.

🏆 LOI Subscriber #TBD

Market movers

South32 shares slid Wednesday after ditching its Mozal Aluminium production guidance, blaming Mozambique's unrest for disrupting raw material transport. The smelter’s FY25 output target of 360,000 tonnes is now off the table, with contingency plans failing to calm the market.

The quick sync

• Faith in Rajiv Jain's GQG Partners holds strong among Australian backers despite Adani turmoil, with analysts and investors calling the stock a buy. (Capital Brief)

• RBA's Hauser flags Trump's trade policies as a wildcard for Australia's inflation outlook, with scenarios ranging from growth boosts to minimal GDP hits. (Capital Brief)

• Star real estate brokers Oren, Tal, and Alon Alexander were arrested by the FBI amid serious misconduct allegations and a raid on Oren's Miami Beach home. (Bloomberg)

• ANU union threatens no-confidence vote in embattled vice chancellor Genevieve Bell amid financial turmoil, Intel role controversy and staff cuts. (Capital Brief)

• John Holland shakes up leadership as cost blowouts and delays plague key projects, including the Gold Coast light rail and Melbourne Metro Tunnel. (AFR)

Trading floor

M&A

• Apple is collaborating with Broadcom to develop its own AI chip to reduce reliance on Nvidia. (Capital Brief)

• NAB sells MLC Life Insurance to Nippon Life, which will merge it with Resolution Life. (Capital Brief)

• Cement Australia has acquired BGC's Cementitious division for up to $800m. (The Australian)

• South32 withdraws production guidance for Mozal Aluminium due to Mozambique unrest. (Capital Brief)

• Macquarie Group's wealth management business is facing uncertainty about its future, with speculation about a potential sale. (The Australian)

• CDC Data Centres is attracting bids from three major investment firms: Australian Retirement Trust, IFM Investors, and Caisse de dépôt et placement du Québec. (AFR)

• Liontown Resources ships first lithium concentrate to LG Energy Solution. (Capital Brief)

• Judo Bank is seen as a potential buyer for Scottish Pacific, which is currently up for sale. (The Australian)

• Fat Zebra acquires Pin Payments to expand its payment solutions. (Capital Brief)

• Bain Capital Credit and GIC Private are selling shares in Judo Capital through a block trade. (AFR)

• Sigma Healthcare and Chemist Warehouse extend merger deadline. (Capital Brief)

• Endeavour Group's sales were negatively impacted by Woolworths' distribution center strike. (Capital Brief)

• Barrenjoey sold 15 million Cettire shares at $1.10 each. (AFR)

• ASIC is suing Rex Airlines for alleged governance failures and misleading conduct. (Capital Brief)

Capital Markets

• Pay.com.au is raising $15m to fund US expansion. (AFR)

• Microsoft is aggressively promoting its AI-powered Copilot, countering criticism from Salesforce. (Capital Brief)

• Silex Systems' subsidiary secures US government funding for uranium enrichment project. (Capital Brief)

• HomeCo Daily Needs REIT reports portfolio value increase. (Capital Brief)

• Vulcan Energy is raising $184m for its Lionheart project. (Capital Brief)

• Champion Iron's iron ore sales are temporarily disrupted due to a load-out facility issue at its Bloom Lake mine. (Capital Brief)

VC

• Geospatial tech startup Terria, backed by Main Sequence, has raised $3m to develop digital twin technology for cities and environmental monitoring. (Smart Company)

• Conry Tech, an air-conditioning tech startup, raises $8.7m in a pre-seed round to reduce energy consumption and emissions. (Startup Daily)

• Brisbane-based startup Askable has raised $22m in its first funding round from prominent investors, valuing the company at $100m. (Startup Daily)

• KAST has raised $10m in seed funding led by HongShan Capital Group and Peak XV Partners. (AFR)

People moves

• Elon Musk becomes first person worth over $400bn. (Bloomberg)

• Despite the Adani controversy, Australian investors continue to support GQG Partners and its founder, Rajiv Jain. (Capital Brief)

• Canaccord Genuity hires Andrew Quail, a former Millennium Management portfolio manager. (AFR)

• Key figures are leaving Firetrail, a Pinnacle-backed investment firm. (AFR)

• Charlie Viola, a high-net-worth adviser, hires NRL star Cooper Cronk to help grow his firm, Viola Private Wealth. (AFR)

• BHP and Rio Tinto face class action lawsuits over alleged sexual harassment and discrimination. (Capital Brief)

The watercooler