National Express, the distressed UK transport group, is considering a £350 million rights issue that would allow the company to remain independent. This news is a serious setback in the Cosmen family's attempt to buyout the company.
The fundraising is being worked on by investment banks Merrill Lynch and Morgan Stanley and has the support of major National Express shareholders
However, National Express's largest shareholder, the Cosmen family, is continuing with its takeover bid. The family already owns 18.5% of the company's shares and launched its bid on 24 July along with private equity group CVC. (Click here to read our coverage of the story)
The Spain-based family appealed directly to the UK transport secretary on Friday to allow them to continue to operate National Express's two remaining rail franchises, East Anglia and c2c. Transport secretary Lord Adonis has yet to return a decision.
The Cosmen family initially became involved with National Express in 2005 when National Express purchased the Cosmen family coach business, Alsa, for £149 million in cash and a 10% stake in National Express. Since then the family has increased its shares in the company and Jorge Cosmen (pictured) has become deputy chairman of National Express, while remaining chairman of Alsa.
The Cosmen family has been involved in transport since 1728 and owned the Spain-based Alsa since it was founded in 1923.
National Express recorded revenues of £2.7 billion in 2008 but the company has been struggling under the weight of its debts after making cash acquisitions of both Alsa and another Spanish coach operator Continental Auto.