National Express to raise £360 million

By Rhys Jones

LONDON (Reuters) - National Express's (NEX.L) 360 million pound cash call will allow the bus and train operator to repay debt and avoid breaching loan terms, but failed to resolve a row with its largest shareholder.

National Express and Spain's Cosmen family, which owns 19 percent, have been at loggerheads over strategy for months.

The Cosmens, which dropped their own proposal to buy National Express in September, now want to sell the company to rival Stagecoach (SGC.L) and have been lobbying other National Express shareholders to push the board to restart talks.

"The family announced it would approve a capital increase if certain conditions were fulfilled, but the capital increase does not fulfil these conditions and does not resolve the large problems of National Express," a spokesman for the Cosmen family said on Wednesday.

He added that the family had not yet taken a final decision on whether to vote against for or against the rights issue at a shareholder meeting on November 27.

National Express needs to get backing from 50 percent of shareholders to go ahead with the rights issue.

"The Cosmens create an obstacle to getting approval for the rights issue, but National Express is confident it can get sufficient backing to get it through" Astaire analyst Douglas McNeill said.

"If the Cosmens don't take it up their share will be diluted but the issue is certainly an irritant for National Express."