LONDON (dpa-AFX) - FirstGroup plc (FGROY.PK), a transport operator in the UK, Friday announced partnership with Hitachi ZeroCarbon Limited as part of the company's decarbonization programme.
The companies plan to form a 50-50 joint venture, NextGen AssetCo Limited, which will purchase up to 1,000 electric bus batteries valued about 100 million pounds. These batteries will be leased from NextGen by FirstGroup to install on its electric bus fleet.
Commenting on the partnership, FirstGroup CEO Graham Sutherland said, 'It will allow us to continue the electrification of our fleet and depots with increased efficiency and greater visibility of our financial commitment, and unlike other possible arrangements, we will retain much of the residual value in the batteries as they are taken off our buses.'
Both the companies have agreed to invest 10 million pounds in NextGen, with the remaining investment to be funded by debt.
FirstGroup expects this partnership to increase adjusted earnings by 3 million pounds per annum by 2026.
The company also believes to save about 20 million pounds in capital expenditure in fiscal 2024 with further savings of nearly 40 million pounds over the subsequent months .
The Group now anticipates fiscal 2024 year end adjusted net cash position to be 40 million pounds -50 million pounds.
Battery and Charging Management Services (BCMS) will be provided by Hitachi ZeroCarbon for the 1,000 buses powered by new batteries and for an additional 500 vehicles beyond fiscal 2026.
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