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FirstGroup mulling options for U.S. assets

(Reuters) - FirstGroup Plc FGP.L said on Monday it was exploring options, including a potential sale, for its North American contract businesses, which could result in the British bus and train operator exiting the United States.

The announcement comes less than a month after FirstGroup said it would focus on its core U.S. contracting businesses, which include the First Student school bus service and First Transit transportation service, leading to calls from two top shareholders to sell those assets instead.

Coast Capital Management and Robert Tchenguiz had separately asserted that Aberdeen-based FirstGroup’s U.S. assets had no synergies with its operations at home, which include a bus and rail division.

The company, which last month reported a bigger first-half loss, has already put its iconic North American intercity bus service Greyhound up for sale this year, due to competition from low-cost airlines and a drop in demand.

First Student, which the company says is the largest provider of home-to-school student transportation in North America, made up more than a quarter of the company’s revenue in 2019. First Transit contributed to 15% of sales.

The company also said it would look at ways to manage costs at its UK bus division, First Bus, before considering a sale process for the business.

Reporting by Shashwat Awasthi in Bengaluru; Editing by Rashmi Aich

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