FirstGroup to announce chair’s departure and £600m cash call

MARTIN Gilbert will step down as chairman of FirstGroup this morning after 27 years at the transport group, as it presses ahead with a £600m rights issue.

Gilbert, who is chief executive of fund manager Aberdeen Asset Management and a director of BSkyB, is one of the firm’s founders. The 57-year-old, who helped create the company in 1986 before it became FirstGroup in 1995, is understood to have considered departing last year but held off while the company was engulfed in a government review over the awarding of the West Coast Rail Franchise.

Gilbert will now take part in the process of selecting a new chairperson before he leaves the company.

The rights issue, along with a trading update, was set to be announced on Wednesday but has been moved to this morning following increased speculation over Gilbert’s future. The company may also review its dividend policy. The £600m issue, which will be used to pay off some of FirstGroup’s £2bn debt, currently worth some 2.9 times its annual earnings, has been fully underwritten by Bank of America Merrill Lynch, JP Morgan and Goldman Sachs. FirstGroup did not comment yesterday.