NatEx rights issue gets 90% approval

By THIS IS MONEY
Updated:

 

National Express signalled a thawing in relations with its biggest shareholder after it revealed 90.5% of new shares were taken up in a £360m fundraising.

National Express train

All aboard: The majority of investors took up the option of extra shares.

Spain's Cosmen family, which owns nearly 20% of National Express, originally voiced opposition to the rights issue.

But the Cosmens last week decided to take up their rights under the fundraising and pump in the £74m needed to maintain their share.

National was already guaranteed to receive the cash under the fundraising, as it was fully underwritten and had been passed by shareholders, albeit despite a third of votes going against the move.

But the take up by the Cosmens may draw a line under a row that has further destabilised National during a troubled time for the bus and rail firm.

The group has been suffering on a number of fronts this year, surrendering its loss-making East Coast franchise last month, fending off takeover approaches and battling against union action.

It was told last month that its East Anglia rail franchise would finish three years early.

The fundraising ends a period of uncertainty over National's balance sheet, but the group is now facing an anxious wait over the appointment of a new chief executive.

National is said to be keen to secure Tube Lines boss Dean Finch having struggled to fill the chief executive post after Richard Bowker resigned around five months ago.

Tube Lines - a maintenance firm that serves part of the London Underground - is reportedly making last ditch attempts to hold on to Mr Finch and has now given him until next Monday to decide.

The top job at National Express will be far from easy, with the group labouring under a £1.1bn debt pile and threats over its rail franchises.

It pulled out of merger talks with rival Stagecoach to press on with the rights issue - a decision that sparked a row with the Cosmens, angered at the hasty dismissal.

But National argued there was a risk that a tie-up could not be completed by the end of the year, which would see it face a breach of banking covenants and result in higher costs.

Deputy chairman Jorge Cosmen had declined to back the rights issue in boardroom voting amid the disagreement over strategy.

The family - which had itself earlier pulled out of a proposed takeover offer for National Express - had raised fears that National Express 'lacks strong management, a clear strategy and long term financial security', according to details of the rights issue released earlier this month.

National Express runs the East Anglia service and London commuter operation c2c, while it also has a large bus division.

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