The FirstGroup plc (LON: FGP) share price fell 2.53% after announcing its latest financial initiative, a groundbreaking £150 million Green Hire Purchase Financing Facility. This significant financial arrangement, secured with the collaboration of a three-bank syndicate, is dedicated to facilitating the acquisition of electric bus bodies.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
The deal includes the chassis and drivetrain but excludes the battery component. This strategic move comes after the Group's partnership with Hitachi in November 2023, which aims to acquire up to 1,000 electric bus batteries.
The newly established Facility is designed to finance the purchase of electric bus bodies, accounting for any governmental co-funding that might be received. It offers a three-year availability for drawdowns with competitive, fixed-margin-plus terms.
The financing options under this Facility will be structured with either seven or ten-year tenors, tailored to meet the specific financing needs of each batch of vehicle bodies.
While the exact number of bus bodies to be financed under this Facility will be determined by various factors at FirstGroup plc's discretion, the Facility is primarily configured to support the acquisition of up to 1,000 electric bus bodies. This aligns closely with the battery procurement strategy the Hitachi Joint Venture outlined.
Furthermore, FirstGroup plc has strategically reduced its future net interest costs by buying back its 2024 6.875% bonds. Since the conclusion of H1 2024, the Group has completed purchases totalling £44.0 million.
As of January 17, 2024, there remains an outstanding amount of £128.1 million in the 2024 bonds. This proactive approach signifies the Group's commitment to financial optimisation and sustainability in its operations.
Graham Sutherland, FirstGroup's Chief Executive Officer, said: “The innovative Green Hire Purchase Facility we have secured to support the purchase of electric buses represents another milestone for the Group. We continue to work hard to secure and optimise available funding to deliver on our First Bus decarbonisation commitment, build out adjacent electrification opportunities and create sustainable value for all our stakeholders.”
FristGroup share price.
The FirstGroup share price fell 2.53% to trade at 167.70p from Tuesday’s closing price of 172.05p.
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YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.