FirstGroup sells $140m legacy Greyhound properties

By Mark McSherry

Aberdeen-based bus and rail giant FirstGroup plc announced the sale by its subsidiary FirstGroup Services, Inc. of all but two of its remaining Greyhound US properties to Twenty Lake Management LLC, an affiliate of Twenty Lake Holdings LLC, for about $140m.

FirstGroup CEO Graham Sutherland said: “The sale of these residual Greyhound properties is another milestone in refocusing FirstGroup on our strong positions in bus and rail in the UK.

“We look forward to building on our robust platform for growth and shareholder value creation in future.”

In addition to the portfolio sale, FirstGroup also completed the sale of a site in Denver for net $9 million in August 2022, with some of the proceeds being applied “in further de-risking of the residual Greyhound pensions liabilities.”

FirstGroup said: “In aggregate the book value of the Greyhound properties sold since the year end was c.$60m as at 26 March 2022, and as a result a profit on sale of c.$90m (net of property tax, selling and other costs) is expected to be booked in the current financial year.

“Following these property sales, FirstGroup’s residual exposure to legacy Greyhound assets comprises deferred consideration, residual real estate in Canada and two sites in the US (both under contract subject to due diligence), and funding awards from the Coronavirus Aid, Relief, and Economic Security (‘CARES’) Act and American Rescue Plan (‘ARP’) schemes relating to the period Greyhound was under the Group’s ownership, altogether valued at c.$57m in total.

“This value is partially offset by legacy Greyhound liabilities (comprising residual insurance and pension liabilities which FirstGroup expects to de-risk in due course) and other provisions, together valued at c.$35m.

“The group will update on the application of the proceeds of the Greyhound property sale alongside publication of its half-yearly results in November.”