21st Oct 2021 10:30
(Alliance News) - FirstGroup PLC on Thursday reported the sale of Greyhound Lines Inc to a subsidiary of FlixMobility GmbH, completing its strategy to focus on its UK public transport businesses.
FirstGroup has previously set out its objective to rationalise its portfolio of businesses in light of the limited synergies between its UK and North American divisions. The company said it believes that the sale of Greyhound Lines provides clarity for Greyhound's customers, employees and stakeholders.
The move also follows the sale of FirstGroup's other North American businesses, First Student and First Transit, to EQT Infrastructure in July.
The Aberdeen, Scotland-based transport company on Thursday said Greyhound sale results in cash of USD172 million, comprising USD140 million paid initially, with USD32 million in unconditional deferred consideration paid in instalments over eighteen months.
The FTSE 250-listed company said it expects to use USD140 million initial cash proceeds to support the close-out of these legacy liabilities and related net costs.
Greyhound properties - with an estimated net market value of USD176 million - will be retained by FirstGroup, it said, with the company planning to initially lease them back to Greyhound at market rates, and then sell them over the next three to five years.
FirstGroup also retains some legacy Greyhound net liabilities, including pension, self-insurance, and finance leases settled at closing, which in total were valued at USD320 million as at March 27.
"Today's agreement regarding Greyhound's future completes the group's portfolio rationalisation strategy which has refocused FirstGroup on its leading UK public transport businesses with a strong platform to create sustainable value going forward," said Executive Chair David Martin.
FirstGroup shares were trading 2.0% higher in London on Thursday morning at 91.70 pence each.
By Evelina Grecenko; [email protected]
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