THE balance sheet of under-pressure transport company FirstGroup has been given a much-needed boost with the news that the sale of the bulk of its London bus business has received regulatory approval.
The Aberdeen-based company announced in April it had agreed to sell eight London bus depots and their associated bus routes for £80 million.
Five are going to existing London bus operator Metroline and three to Australia's Transit Systems Group.
This leaves it with a single depot in the capital, which it also intends to sell.
Giles Fearnley, FirstGroup's managing director for UK Bus, said: "The sale of these operations reflects further progress in our programme to reposition our UK Bus portfolio, recover performance and equip the business to achieve sustainable revenue and patronage growth. Our strategy is to focus on those areas of the country that offer the greatest potential and, while we have been a key operator in London for many years, our focus going forward is on the deregulated market outside of the capital.
"We continue to work closely with Transport for London to ensure that the transfer to new operators goes as smoothly as possible."
FirstGroup's bus division has struggled in recent years and chief executive Tim O'Toole is keen to focus on the routes that provide the highest margin.
The firm has sold other routes and depots elsewhere in the UK to rivals including Perth-based Stagecoach and Go-Ahead, which has headquarters in Newcastle.
FirstGroup, which operates buses in cities including Aberdeen and Glasgow and runs the ScotRail franchise, is also seeking to improve its balance sheet and avoid being downgraded to junk status.
Earlier this month, investors overwhelmingly agreed to a £615 million equity raising. The results will be announced on Wednesday.
FirstGroup has laboured under near £2 billion of debt since its £1.7bn takeover of US company Laidlaw in 2007.
Problems at FirstGroup came to a head after it was awarded, and then stripped of, the West Coast Main Line rail franchise, after the Government discovered flaws in the bid procedures.
Earlier this month, it emerged Mr O'Toole was offered a £592,000 bonus for the last financial year. He waived the award, as he did the previous year.
FirstGroup's longstanding chairman, the Aberdeen Asset Management chief executive Martin Gilbert, has announced he is retiring from the board.
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