National Express investors say 'yes' to £360m cash call

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The Independent Online

National Express shareholders voted "yes" to the board's proposal for a £360m rights issue yesterday, ending weeks of uncertainty during which the company's biggest investor tried to drum up opposition to the plan.

The resolutions authorising the company to proceed were passed by around two-thirds of voters at an extraordinary meeting in London yesterday, and some 90 per cent of institutional shareholders in advance. But on the day – after a vocal campaign from Spain's Cosmen family, which owns almost 20 per cent of the stock – a third of shareholders still voted against.

The dispute is over how best to pull National Express out its difficulties. The beleaguered group is labouring under £1.1bn of debts and has had a torrid year after the loss of the East Coast Main Line rail franchise and the resignation of the chief executive, Richard Bowker, in July.

The company's board says the cash injection is needed to ensure that the group does not fail debt covenant tests it faces before the end of the year. But the Cosmens say there is "an absence of a well-defined strategy". The family claims the rights issue is too large, particularly at a time when there is no chief executive, and the company should be exploring other issues such as renegotiating its covenants.

Its chairman, John Devaney, yesterday stressed that the disagreements were in the past, despite the high profile opposition from Jorge Cosmen, who is his deputy on the board. Earlier in the week he described Mr Cosmen as "an asset" to the board. The Cosmens are also keen to emphasise their commitment. "We have always been, and remain, a committed, long-term shareholder in the company," the family said.

The new shares will be issued on Monday on a seven-for-three basis.