Monday, January 18, 1999 Published at 14:32 GMT
Business: The Company File
Stagecoach enters Hong Kong
This is not the first time Stagecoach have tried to enter the Hong Kong market
The UK transport group Stagecoach has taken over a Hong Kong bus operator.
HongKong's CityBus operates almost 1,200 buses and has a workforce of around 4,200.
It has an estimated 63% share of the Hong Kong island bus market, as well as running a small bus service in China and some cross-border bus routes.
Stagecoach, based in Perth, has arranged to raise some £140m($231.5 million) to help finance the purchase.
"This acquisition will allow Stagecoach to expand further its international bus business, whilst consolidating the group's position in the Hong Kong and Chinese transport arenas," said Chairman Brian Souter.
"CityBus offers Stagecoach the opportunity to enter one of the most exciting and developed bus markets in the Asia Pacific region where there are good opportunities for organic growth and new network development," said Chief Executive Mike Kinski.
First stop in Hong Kong
The deal is Stagecoach's latest attempt to break into the Hong Kong bus market and follows its unsuccessful bid last year for a franchise of 88 bus routes in the former British colony.
Stagecoach lost out that time to its Aberdeen-based rival FirstGroup which won a five-year contract in a joint venture with Hong Kong property group New World Development Co Ltd.
CityBus had debts of HK$1.21bn or £95.5m at the end of last year, when its net assets stood at HK$1.5bn or £90m.
The British company, which operates bus and rail operations in the UK, has acceptances for a total 59.2% of CityBus's share capital.
Stagecoach is to partially finance the deal with its placing of 65 million new shares for around £140m.
"The fund raising accompanying the transaction also enables Stagecoach to maintain its existing capital structure," added Souter.
Stagecoach's share price was up 4.5p, or 2%, at 226.5p by 1320 GMT.
Late last year Stagecoach announced rising earnings for its UK operations, spread across trains and buses.
This was helped by some impressive profit figures from its South West trains franchise.
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