* To sell FirstStudent, FirstTransit to Sweden's EQT
Infrastructure
* Proposes 30p per share return to shareholders in 2021
* Greyhound not part of sale
* Shares rise as much as 19%, highest in 13 months
(Adds EQT statement, debt, peer performance)
By Yadarisa Shabong
April 23 (Reuters) - FirstGroup agreed to sell two
North American bus businesses for $4.6 billion including debt to
Swedish private equity firm EQT Infrastructure on Friday, to
focus on its bus and rail operations in the UK.
Shares in the FTSE 250 firm, operating First Bus and four
train contracts in Britain, surged as much 19% to hit a more
than one year high before paring to trade 8% higher by 1057 GMT.
"We see the disposal as a clear positive, allowing the group
to be simplified, with reduced leverage and legacy liabilities
addressed," Liberum analysts said.
The company plans to use proceeds to pay down debt,
including UK government coronavirus aid, contribute to its UK
pension schemes and return money to shareholders. It had net
debt of about 2.96 billion pounds ($4.11 billion) as of the end
of September 2020.
About 365 million pounds of the receipts from the sale or 30
pence per share has been earmarked to return to shareholders in
2021, it said.
Aberdeen-headquartered FirstGroup began the sale process for
the FirstStudent and FirstTransit businesses a year ago,
following pressure from major shareholder Coast Capital.
Its popular Greyhound intercity coach service was also put
up for sale in 2019 but the company has yet to find a buyer.
EQT said it would invest in operational technology and fleet
decarbonisation of the around 43,000 yellow school buses and
14,000 other vehicles owned and operated by the businesses.
FirstGroup, which like other transport operators has seen a
collapse in passenger numbers due to pandemic restrictions, on
Friday guided to annual profit ahead of its prior expectations.
Shares in FirstGroup have outperformed its UK peers National
Express, StageCoach and Go-Ahead in the
past 12 months.
"As economies begin to emerge from the pandemic restrictions
and society begins the process of building back better, the
vital role of public transport is clear," CEO Matthew Gregory
said.
Sky News first reported https://news.sky.com/story/firstgroup-ends-long-journey-to-sale-of-us-bus-operations-with-3-3bn-eqt-deal-12284357
the divestment late on Thursday.
($1 = 0.7203 pounds)
(Reporting by Yadarisa Shabong, Kanishka Singh and Sabahatjahan
Contractor in Bengaluru; editing by Elaine Hardcastle and Jason
Neely)
