TRANSPORT giant FirstGroup has announced that 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.
READ MORE: FirstGroup chief yields to major investor backlash against US deal
It was also announced in July that chief executive Matthew Gregory would stand down.
The firm also said that 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.
However, the group’s £200m 6.87% bonds due September 2024 are not affected and remain outstanding.
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%, or 0.15p.
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