Stagecoach loses £12.3m on sale of Swebus

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The Independent Online

Stagecoach, the bus and rail group, said yesterday it was withdrawing from Scandinavia, booking net losses of £12.3m, as rival company Arriva confirmed that it was in talks to boost its presence in the region.

Stagecoach, the bus and rail group, said yesterday it was withdrawing from Scandinavia, booking net losses of £12.3m, as rival company Arriva confirmed that it was in talks to boost its presence in the region.

The unconnected announcements underline the different expansion strategies favoured by the two, with Stagecoach concentrating its non-UK efforts on the US market. Stagecoach is currently marketing a share issue to raise a net £389m to refinance its $1.8bn purchase of Houston-based Coach USA, which it bought in June.

The issue will be priced next week, probably on Tuesday, and will be keenly watched by analysts as a litmus test of investor sentiment towards the leading passenger-transport play. Stagecoach said yesterday that the £100m cash proceeds from the disposal of Swebus would be used to repay a portion of the financing arranged for the Coach USA deal.

Brian Souter, Stagecoach chairman, said: "The sale of Swebus will allow our management to focus on resources in North America, where we believe we can achieve more attractive returns."

Stagecoach shares fell 10.25p to 173.75p yesterday, their lowest level in 20 months.

The company said that after exchange-rate movements, goodwill and debt-related concerns were taken into account, it would record a pre-tax loss of £12.3m on the deal. Separately, Sunderland-based Arriva said it was in exclusive talks to acquire Norgessbus, Norway's largest private bus company, but disclosed no timetable or potential price tag. It said the purchase, if made, would be funded from existing resources.

Shares in Arriva, which has emphasised expansion in continental Europe, slipped 14.75p yesterday to 315p.

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