Scottish transport giant secures backing for new sustainable journey ahead

TRANSPORT company Firstgroup has announced it has signed a new £300 million sustainability-linked credit facility with a group of its relationship banks.

The Aberdeen-based bus and rail company said the new revolving credit facility (RCF) has an initial maturity of four years, with the option to extend by a further year, subject to bank consent. The covenants have been structured to reflect the future shape of the group and are expected to provide “substantial headroom”, Firstgroup said.

The arrangement, outlined in a statement to the London Stock Exchange, has a direct link to the firm’s decarbonisation plans, which includes a commitment to operating a zero emission First Bus fleet by 2035.

One aspect of the amount paid back involves interest variations related to performance measures including fleet emissions.

The news comes after the sale of interests in North America, which was a move opposed by its largest shareholder.

It was also announced in July that chief executive Matthew Gregory would stand down.

The firm also said it expects to have net debt of around £100m following fund flows related to the

First Student and First Transit transaction.

Firstgroup told shareholders that it has recently also repaid the UK Government’s Covid Corporate Financing Facility and is poised to give notice to the holders of its £325m 5.25 per cent bonds due in November 2022 that it will exercise its right to repay them early.

Ryan Mangold, Firstgroup chief financial officer, noted: “This has been an important step that complements the rationalisation of the group and ensures that our debt arrangements are fit-for-purpose for our future development.

“We are pleased with the support shown by our relationship banks for our new facility, which has a clear link to our decarbonisation plans, including our commitment to operating a zero emission First Bus fleet by 2035.”

Firstgroup shares closed at 90.25, up 0.17 per cent, or 0.15p.