An excellent summary of the "Building a Greater West" omnishambles.
It is patently clear that the
DfT» are continuing to reward failure with contract extensions so as to keep FirstGroup in the rail franchise business.
I expect other sweeteners and secret deals will be, or have been, given to FirstGroup to keep them at the helm of TransPennine and
SWR» . Could all be for nought though if FirstGroup goes 'nipples elevated' or has to dump unprofitable businesses to survive.
Private Equity firms are circling like predators. There's still some life in the FirstGroup flesh and bones, but it is slowing down. Any sign of weakness and they will pounce. Stripping off the meaty bits and leaving the rest for the scavengers. The
UK▸ Rail division would likely not be very tasty and its remains will have to be cleared up by HMG - operator of last resort.
FirstGroup is currently loss making and is highly leveraged with debt well in excess of equity. Short term that can be managed, but if it doesn't return to profit soon, or its bankers start getting jittery, then liquidity could disappear very quickly. Break up, sale or collapse are all distinctly possible. November's half yearly results will make for interesting reading.
https://www.bloomberg.com/news/articles/2018-09-06/firstgroup-is-said-to-draw-private-equity-interest-including-cvc