6th May 2020 15:27
(Alliance News) - National Express Group PLC on Wednesday said it has raised GBP235 million pursuant to a previously announced share placing and subscription.
The public transport operator has placed 101.9 million new shares at a price of 230 pence each, a 3.4% discount to Tuesday's closing stock price.
The company's board and executive management team also subscribed an aggregate of 428,782 new shares, contributing GBP986,198 to the company.
Shares in National Express were down 3.7% at 229.20 pence each in London on Wednesday afternoon, giving it a market capitalisation of GBP1.17 billion.
Bank of America Securities and HSBC acted as joint global coordinators and joint bookrunners for the placing.
Earlier on Wednesday, the company announced plans to place up to 20% of its shares and an extension to its Covid-19 response plans.
National Express has already withdrawn its 2019 dividend and temporarily suspended all National Express coach services in the face of the coronavirus pandemic. However, as most of its revenue is contracted and it has managed costs, its earnings before interest, tax, depreciation, and amortisation has remained positive, as has cashflow, it said.
The company said it has made progress in obtaining further liquidity and has around GBP1.3 billion worth of cash and undrawn committed facilities. It has also signed a pre-emptive gearing covenant waiver on its USPP and banking facilities for 2020.
Looking ahead, National Express aims to reintroduce its dividend alongside its 2021 interim results. It will set a new target gearing range of between 1.5 and 2.0 times once its placing is complete, a target it expects to achieve by 2021 end.
Chief Executive Dean Finch said: "Our immediate priorities have been to protect the health and wellbeing of colleagues and customers and secure the long term sustainability of the business. We have acted swiftly and decisively and have made significant cost-cutting measures, struck agreements with public authorities and contracted customers to maintain payment, and secured enhanced liquidity and covenant waivers. These have all been crucial in underpinning our future prospects.
"The placing builds on these actions, providing enhanced resilience and financial flexibility as we address an extended period of uncertainty and it increases our ability to invest in further growth opportunities once this period has passed. By strengthening our balance sheet we are also able to set a new, lower gearing target. Alongside our industry leading operational capabilities, I believe a stronger balance sheet will be a source of differentiation and competitive advantage for National Express going forwards."
By Tapan Panchal and Anna Farley; [email protected] and [email protected]
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