Transport group to return £10m to shareholders
Transport group Rotala is to spend up to £10m on buying back shares at a premium as it seeks to return its share price to pre-pandemic levels.
Shares in the Tividale-based group closed last night at 42p, the highest point in nearly three years but still around one-quarter below its value before the first lockdown.
The bus operator has launched a tender offer priced at 55p per share, with shareholders able to tender up to 35.7% of their holdings.
In order to finance the offer, the Company has drawn down £10.0m on its existing revolving commercial loan facility from HSBC.
In December Rotala revealed it had been unsuccessful in its bids for two of the larger Greater Manchester franchises and had agreed in principle to dispose of its Bolton depot to the Greater Manchester Combined Authority and the majority of the busfleet based there to the incoming franchise operators.
Rotala said it “does not expect to acquire a material number of new vehicles” in the current financial year, and will then begin replacing its fleet with electric buses from the following year.
The group believes the tender offer “is the best and most efficient way to return a significant amount of capital to shareholders in a short space of time”.