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Share Name Share Symbol Market Type Share ISIN Share Description
Firstgroup Plc LSE:FGP London Ordinary Share GB0003452173 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 84.40 84.70 84.95 0.00 01:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Travel & Leisure 7,754.6 -299.6 -27.0 - 1,031

FirstGroup PLC Sale completion and increase in proposed return of value

22/07/2021 7:00am

UK Regulatory (RNS & others)


 
TIDMFGP 
 
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION 
Thursday 22 July 2021 
 
 
                                FirstGroup plc 
           Sale completion and increase in proposed return of value 
 
  * Sale of First Student and First Transit to EQT Infrastructure completed 
    yesterday evening 
 
  * Proposed return of value in autumn increased to £500m (c.41p per share) 
    from £365m 
 
  * Estimated pro forma net debt of c.£100m following the Sale and the use of 
    proceeds is unchanged, as the increase in proposed return of value 
    reflects: 
      + $58m increase in cash proceeds received at completion due to final 
        working capital and debt and debt-like balances 
      + Increased clarity for First Rail resulting from agreement of SWR and 
        TPE National Rail Contracts and final rail franchise termination sums 
      + Cashflows of the continuing Group anticipated to be better than was 
        assumed in April 
 
FirstGroup plc ('FirstGroup' or the 'Group') is pleased to announce that it has 
completed the sale of First Student and First Transit to EQT Infrastructure 
(the 'Sale'), which was approved by FirstGroup shareholders on 27 May 2021. 
Completion follows the satisfaction of the conditions precedent to the Sale, as 
outlined in the circular to FirstGroup shareholders published on 10 May 2021. 
 
The net disposal proceeds of $3,123m received by FirstGroup at completion is an 
increase of $58m over the base amount previously announced, due to the final 
adjustments for working capital and debt and debt-like items as described in 
the circular. 
 
The Board intends to increase the proposed return of value to shareholders to £ 
500m (equivalent to c.41p per share) from £365m. The increased quantum reflects 
the higher cash proceeds received from the Sale, the increased clarity for 
First Rail resulting from agreement in May 2021 of SWR and TPE National Rail 
Contracts and the TPE final rail franchise termination sum being c.£50m lower 
than anticipated, and improving cash flow expectations for the continuing Group 
as a result of further easing of pandemic restrictions in our core UK bus and 
rail markets. The estimated pro forma net debt of c.£100m for the ongoing Group 
following the Sale, and the other uses of net disposal proceeds set out in the 
circular, are therefore unchanged. The proposed return of value is expected to 
be undertaken in the autumn of 2021, with the distribution mechanism to be 
announced in due course in consultation with shareholders. 
 
In addition to the cash consideration received at completion of the Sale, the 
First Transit earnout worth up to $240m was also agreed as part of the Sale 
consideration, under which the Group will receive 62.5% of First Transit's 
value above $380m, either in three years (following an independent valuation) 
or sooner in the event that it is sold by EQT Infrastructure to a third party. 
 
The Board is committed to keeping the balance sheet position of the ongoing 
Group under review and will consider the prospects for making further 
additional distributions to shareholders in due course, following 
crystallisation of the First Transit earnout noted above, resolution of the 
legacy liabilities related to Greyhound and the potential release of monies 
from pension escrow (up to £117m). The Board also notes the capacity to 
increase gearing over time, as end market conditions and hence business 
performance improves. 
 
First Student and First Transit will be reported as discontinued operations in 
the Group's annual results to the end of March 2021, which will be announced on 
27 July. 
 
Commenting, FirstGroup Chairman David Martin said: 
"We are pleased to announce the completion of the sale of First Student and 
First Transit and a significant increase in the proposed return of value to 
shareholders this autumn. This delivers on our strategic objective and creates 
a focused and stronger business with a bright future. The vital role of public 
transport in the UK has never been clearer, and with the most supportive policy 
backdrop in decades coupled with our strong credentials, FirstGroup is in prime 
position to deliver on its goals with a well-capitalised balance sheet and an 
operating model that will support attractive dividends." 
 
Commenting, FirstGroup Chief Executive Matthew Gregory said: 
"We have delivered this transformational sale which resolves the Group's 
long-standing legacy liabilities, puts the Group in a strong position to 
benefit from its many opportunities, and releases £500m of value to return to 
shareholders. I would like to thank everyone in First Student and First Transit 
for the pivotal role they play in their communities. As part of the FirstGroup 
family for many years, they have gone from strength to strength, and I am 
confident that they will continue to flourish as part of EQT Infrastructure." 
 
Contacts at FirstGroup:                  Contacts at Brunswick PR: 
Faisal Tabbah, Head of Investor          Andrew Porter / Simone Selzer 
Relations                                Tel: +44 (0) 20 7404 5959 
Stuart Butchers, Group Head of 
Communications 
corporate.comms@firstgroup.com 
Tel: +44 (0) 20 7725 3354 
 
Notes 
Legal Entity Identifier (LEI): 549300DEJZCPWA4HKM93. Classification as per DTR 
6 Annex 1R: 2.2. This announcement contains inside information. The person 
responsible for arranging the release of this announcement on behalf of 
FirstGroup is David Isenegger, Group General Counsel and Company Secretary. 
 
 
 
END 
 
 

(END) Dow Jones Newswires

July 22, 2021 02:00 ET (06:00 GMT)

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