Shareholders back National Express issue
TRAIN and bus operator National Express has secured 90.47 per cent acceptances for its £360m rights issue – with the backing of its biggest shareholder the Cosmen family.
The cash call was made in a bid to tackle the company’s £1.1bn debt.
Global co-ordinators Bank of America Merrill Lynch and Morgan Stanley will now try to offload the remaining 34m shares.
Deputy chairman Jorge Cosmen, who had been at war with the rest of the company’s board and threatened to boycott the issue, took part.
He had supported a takeover bid by rival Stagecoach but finally backed the cash call – spending £74m on the issue. His family owns 18.5 per cent of the group.
National Express has been hit by a series of setbacks which have forced it into the issue.
It handed over control of the East Coast Mainline route to the government on 13 November.
The company will also be stripped of its East Anglia franchise when its deal expires in March 2011.
The group has not had a chief executive since Richard Bowker quit in the summer.
Last month, executive chairman, John Devaney, said the fundraising “significantly reduces the group’s net debt to a more sustainable level and allows management to focus on value creation for shareholders rather than short term debt management.”
“We have substantial confidence in our future and believe that the actions we are taking to strengthen our balance sheet provide us with the flexibility to pursue the group’s longer term growth objectives and maximise shareholder value.”
He walked away from merger talks with Stagecoach in October.
Meanwhile National Express faced huge fines for failing to make repayments on loans by the end of the year. The cash call will ease the pressure on repaying debt.