May 6, 2020 / 7:03 AM / in a month

UPDATE 2-National Express raises $290 million in equity to ride out pandemic

(Adds pricing, shares)

By Yadarisa Shabong

May 6 (Reuters) - Train and bus company National Express Group raised about 235 million pounds ($290.93 million) in new equity on Wednesday to help it ride out the COVID-19 pandemic.

The British company, which operates in eight countries and has seen a collapse in activity due to nationwide lockdowns, also said it had secured debt waivers for the rest of the year.

However, it warned that group core profit in 2020 could fall about 40% from 2019 levels under its worst-case scenario.

The 101.9 million new shares were placed at a price of 230 pence per share, a roughly 3% discount to Tuesday’s closing price, it said.

National Express joins a long list of companies rushing to raise money through debt or equity sales during the coronavirus crisis.

Shares in the FTSE 250-listed company, which have lost around half of their value since the start of the year, were down 4.7% at 227 pence by 1325 GMT.

National Express is trimming costs by suspending its UK coach network, cutting executive pay and putting capital spending on ice.

The company said it continued to generate positive cashflow and earnings due to the cost cuts and its reliance on contracts for the bulk of its revenue.

“Whilst the next few months will remain uncertain, we are already seeing a number of growth opportunities,” Chief Executive officer Dean Finch said in a statement.

With about 1.3 billion pounds in cash and undrawn credit facilities at the end of April, National Express said it aimed to reinstate a dividend payment in July 2021. ($1 = 0.8078 pounds) (Reporting by Yadarisa Shabong in Bengaluru; Editing by Bernard Orr, Anil D’Silva, Kirsten Donovan)

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