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Law360 (May 6, 2020, 4:34 PM EDT) -- British transportation group National Express, which operates buses and trains in regions including Europe and North America, said Wednesday it priced a £235 million (about $290 million) share offering to help it deal with the economic fallout from the COVID-19 pandemic.
National Express Group PLC said the offering represents about 20% of its issued share capital and about a 3.4% discount from its closing share price Tuesday. The Birmingham-based company priced its roughly 102 million shares at about $2.84 each.
The company told British regulators Wednesday the offering is meant to help it continue through the economic downturn caused by the novel coronavirus pandemic, which has seen National Express' stock price fall by roughly half since the beginning of the year.
Proceeds from the offering will be used to strengthen the company's balance sheet by reducing debt and leverage, as well as prepare National Express for business opportunities when it eventually exits the crisis, the company said in a market update to the U.K.'s Financial Conduct Authority.
Dean Finch, National Express group chief executive, said in Wednesday's FCA filing that the company's immediate priorities have been to protect the health and well-being of its workers and customers, and to secure the long-term sustainability of the business.
"The placing builds on these actions, providing enhanced resilience and financial flexibility as we address an extended period of uncertainty, and it increases our ability to invest in further growth opportunities once this period has passed," Finch said.
National Express also struck a sober tone, however, saying it is budgeting based on a "pessimistic" scenario that sees further lockdowns to contain future peaks of infection. In such a scenario, the company said it would expect to see a slow recovery starting in the third quarter of 2020 and continuing through 2021, but with revenue down about 25% from pre-COVID-19 levels.
National Express, which according to its website has nearly 32,000 vehicles and about 51,000 employees, previously sought to cut costs through measures such as reducing service and pausing dividend payments.
U.K. Prime Minister Boris Johnson announced a nationwide lockdown March 23 to try to slow the spread of the novel coronavirus, which causes the COVID-19 disease.
According to the company's website, just over half of National Express' roughly $3.4 billion in revenue comes from European countries such as the United Kingdom, Spain and Germany, and about 40% from the United States.
While the COVID-19 outbreak has caused a significant decline in business, National Express said its overall revenue for the first three months of 2020 was still up 8.9% compared with the same period last year.
National Express operates in eight countries, running trains and school and coach buses, according to its website. The company has the largest market share for long-haul coach bus transportation in Spain and the United Kingdom and is the second-largest school bus operator in North America, it said.
The joint global coordinators for the offering Wednesday were BofA Securities and HSBC Holdings PLC.
A representative for National Express did not immediately respond to a request for comment, and counsel information for the offering was not available.
--Editing by Orlando Lorenzo.
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