March 11, 2020 / 8:03 AM / a month ago

FirstGroup to sell North American units, not seeing coronavirus impact

FILE PHOTO: A Virgin Trains West Coast Mainline service from London to Manchester pulls out of the station in Macclesfield, Britain, August 14, 2019. REUTERS/Phil Noble

LONDON (Reuters) - British bus and rail company FirstGroup (FGP.L) announced plans to sell its two North American-based bus units, as it said it had not seen a significant impact from coronavirus on demand for travel so far.

The company said a formal sale process for the North American units, which run yellow school bus services and bus contracts in the U.S. and Canada, was underway and there was significant interest expressed by potential buyers.

Major shareholder Coast Capital Management had pressured FirstGroup to sell the businesses, saying there were no synergies between the company’s UK and North American operations.

The divestment of the businesses, which have combined annual revenues of $3.8 billion (2.9 billion pounds), will leave Aberdeen-based FirstGroup focused on Britain, where it runs bus services and has a number of rail contracts.

The company said demand for those services had not been affected by coronavirus so far, adding it was “monitoring the situation closely while planning for a range of scenarios including changes to current government guidance or policy”.

For its 2020 full-year, the company said it was on track to meet its expectations for operating profit.

Reporting by Sarah Young, Editing by Paul Sandle

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