Wednesday July 1, 11:27 AM
FACTBOX-Troubles at National Express
July 1 (Reuters) - British transport operator National Express (LSE: NEX.L - news) , a takeover target, is to hand a major rail franchise back to the government, after the recession hit its business plan for loss-making London to Edinburgh trains.
National Express also said chief executive Richard Bowker, who negotiated the terms of the 1.4 billion pound East Coast agreement, would leave the company at the end of August.
Following are key facts about the company:
* EAST COAST RAIL ROUTE:
-- National Express has been struggling with the terms of its East Coast rail franchise linking London with Edinburgh, Scotland.
It said in February its British rail business was particularly sensitive to the recession, and talks were under way with the government to resolve issues with the franchise. The group had agreed to pay the government around 1.4 billion pounds from 2009-2015 to win the franchise, a decision based on growth targets set before the onset of a recession.
-- Its shares have lost over 40 percent of their value since the start of the year on investor concerns about its debt and falling passenger growth at the East Coast rail route.
-- In May the Daily Telegraph quoted a Department of Transport spokesman as saying National Express risked losing all three of its rail franchises if it handed back the East Coast service.
* DEBT:
-- The group said in May a rights issue was one possible way of reducing a debt-pile that stood at 1.18 billion pounds ($1.94 billion) as of end Dec. 2008. Analysts had been saying that the group, which has operations in North America and Spain as well as Britain, would need a rights issue to manage the debt.
-- The group's banks agreed on June 17 to delay a tightening of debt terms for six months, giving it greater flexibility as it looks at ways to reduce the debt.
-- On Monday it rejected a bid approach from larger rival FirstGroup (LSE: FGP.L - news) .
-- National Express agreed in May to sell its London bus business to Dutch group NedRailways for 32 million pounds in a bid to reduce borrowings. Also, in December, it cut around 750 British jobs, about 5 percent of the UK workforce.
* The company's total group revenue rose 7.9 percent in the first three months of 2009 with underlying growth of 4.1 percent at its UK Bus and Coach (NYSE: COH - news) division. For the whole of 2008, the total group revenue grew 5.9 percent to almost 2.8 billion pounds.
* The London-headquartered company employs around 45,000 people worldwide. In 2007 National Express bolstered its presence in the Spanish bus market with the 450 million-pound acquisition of Continental Auto.
(Writing by Jijo Jacob, Bangalore Editorial Reference Unit; Editing by David Cutler and Jon Loades-Carter) Keywords: NATIONALEXPRESS/
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