Coronavirus: First Group receives £300m from Bank of England
Transport operator First Group today announced it had received £300m from the Bank of England to help deal with the financial damage of the coronavirus pandemic.
First is currently running its bus services at 40 per cent of normal capacity, although passenger numbers have dropped 90 per cent, the firm said.
The company’s rail franchises are operating under the government’s emergency measures agreement, which means the company will be paid a fixed sum for until 20 September at the earliest.
First Group also added that it expected to take advantage of the US government’s Cares Act funding, which will help it protect its North American businesses such as Greyhound.
Shares in the company rose nearly five per cent today to 62.00p.
Including today’s loan from the Bank of England’s Covid Corporate Finance Facility, First now has undrawn committed headroom and free cash of around £800m.
The additional steps to bolster the firm’s financial position comes after chief executive Matthew Gregory and his senior leadership team agreed to a 20 per cent pay cut.
At the beginning of April the Department for Transport agreed a £167m package to help the UK’s bus operators, which have seen passenger numbers implode due to the pandemic.
Gregory said: “As an organisation we have taken rapid action to manage our costs, preserve cash and protect the group’s financial position in order to ensure we are able to deliver the continuity of transport that is so essential to governments, local communities and our customers both now and once the present crisis is overcome.
“The support we have received from governments and our customers is testament to the importance of the services we provide”.
Gregory also paid tribute to a number of First Group employees who have died from the coronavirus:
“I am deeply saddened that the coronavirus pandemic has now tragically claimed the lives of colleagues from within each of our five divisions in North America and the UK.
“Their families, friends and co-workers have our heartfelt condolences and support, and the thoughts of everyone at First Group are with all those affected by the global pandemic”.