Ashurst helps push through National Express rights issue

Ashurst has played a major role in helping beleaguered transport operator National Express secure a disputed £360m rights issue, despite opposition from its major shareholder.

Corporate partner Steven Fox acted for the operator as the vote in favour of the cash call was eventually carried with a two-thirds majority.

The Spanish Cosmen family, which owns nearly 20 per cent of the company and had supported an unsuccessful summer takeover bid led by CVC Capital Markets, voted against the share issue at an extraordinary general meeting today.

The successful vote follows yesterday’s announcement from the Department for Transport (DfT) that the company’s two remaining franchises would not be withdrawn immediately under cross defaulting rules following the handover of the East Coast mainline earlier this month.

The government climbdown marks a victory for Ashurst transport partners Lee McDonald and Arundel McDougall who have acted for National Express throughout a fraught few months.

Fox said: “The advice from Lee and Arundel has been superb and the government has realised that. It was never in anybody’s interest [to withdraw the franchises].”

It is understood that National Express would have fought any attempt to impose cross defaulting rules to effectively re-nationalise the lines and end the company’s involvement in UK rail. The contracts for the East Anglia and c2c lines run until 2011 and will now be seen through to completion.

Transport secretary Lord Adonis did however confirm that it would not extend the contract on the East Anglia franchise to 2014.

The capital raised by the rights issue will be used to pay down some of the company’s £1bn worth of debt.