First signs electric bus body syndicate
FirstGroup has signed a £150m Green Hire Purchase Financing Facility with a syndicate of three banks to support the purchase of electric bus bodies (the chassis and drivetrain, excluding the battery). This follows the strategic Joint Venture with Hitachi to purchase up to 1,000 electric bus batteries announced by the Group in November 2023.
The facility provides the funding for electric bus bodies, net of any government co-funding received, and is available for drawdown over three years, on a competitive fixed margin plus basis. Funding under the Facility will be provided in tenors of either seven or ten years depending on the specific requirement at the time for each batch of vehicle bodies to be financed.
While the total number of bus bodies to be financed will depend on a number of factors at the Group’s discretion, including forward curve pricing, the facility has been sized to support the purchase of up to 1,000 electric bus bodies and to broadly match the battery arrangements within the Hitachi Joint Venture.
In addition, the Group has continued to opportunistically purchase its 2024 6.875% bonds resulting in a reduction in future net interest cost. Purchases totalling £44m have been completed since the end of H1 2024 and as at 17 January 2024, £128.1m of the 2024 bonds now remain outstanding.
“The innovative Green Hire Purchase Facility we have secured to support the purchase of electric buses represents another milestone for the Group” – Graham Sutherland, FirstGroup Chief Executive Officer
Graham Sutherland, FirstGroup 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.”