Nat Express bidder pleas for rail lines
THE Spanish-led group bidding for National Express has appealed to the UK government not to strip the troubled transport group of its last two rail franchises.
The consortium – made up Spain’s Cosmen family, the largest shareholder in National Express, and private equity group CVC – have made any takeover of the UK transport group contingent on the retention of its two more profitable rail routes.
The appeal has been made to transport secretary Lord Adonis, who is considering what to do about the group’s remaining East Anglia and c2c routes.
The development came as National Express revealed it had plunged into the red in its first half, thanks to a writedown of £54.7m after it was stripped of its East Coast franchise by the government.
It fell to a £36.6m loss compared to a profit of £35.9m in the same period last year, and announced it would scrap its interim dividend to pay down debt.
The company said it had reduced net debt by over £200m in the first-half to £977.5m while its cost saving programme was on target to deliver planned savings of £40m each year.
Analysts said the group’s huge debt burden could hinder its attempts to fight off the £500m takeover from the Cosmen consortium. National Express says the offer undervalues the company.
Finance Director Jez Maiden said the bus and rail firm had not ruled out a rights issue or disposing of assets.
“We would certainly look at all options including equity fundraising and disposals but at this point we’ve made no decisions,” he said.