38p a premium of 40 per cent to the reference price The group's train franchises include Midland Mainline, Gatwick Express, ScotRail and Silverlink, which was hit yesterday by the withdrawal of its entire fleet of class 321 trains on safety grounds.Rail operating profits for the six months increased 78 per cent to £7.3m on the back of a 5 per cent increase in passenger numbers, the biggest increase in more than two years.Traffic levels on the group's London and South-east commuter services, which include the London-Tilbury-Southend line C2C and West Anglia Great Northern, increased 6.5 per cent. "With so many exciting opportunities around, consolidation through mergers is not on the agenda," he added.He was speaking as National Express reported a 23 per cent increase in first-half, pre-tax profits to £18m, helped by a strong recovery in its rail division. National Express, the country's biggest train operator, has abandoned attempts to spearhead a rationalisation of the industry after signs that passenger numbers are at last recovering from the downturn which followed the Hatfield disaster three years ago. Last week EMI saw its share price fall after the world's biggest record company, Universal, announced it would be slashing prices of CDs by up to 24 per cent in the US.Shares in EMI closed up 0.25p at 137.25p.. Last week Hilton and LogicaCMG followed Scottish Power and Cable and Wireless in taking advantage of a combination of low interest rates and stronger equities markets.The issue was heavily oversubscribed and should give the company confidence to make further restructuring moves.EMI, whose artists range from rock dinosaurs Rolling Stones to newer talent such as Coldplay and Norah Jones, had their credit-rating cut to "junk" level by the credit ratings agency Moody's in March, and Standard & Poor's rates EMI debt at the lowest investment-grade rating of BBB-.With net debt of £860m at the end of March and market capitalisation of £1bn, the company's debt situation has been a concern for some time. Steps may be taken "in the near future" to further diversify debt and lengthen debt maturity, he added.Convertible bonds have proved a popular form of funding for UK companies this year. Merger talks between Warner Music and Bertelsmann's music operation, BMG, are currently at an advanced stage. However, analysts agreed that EMI would need to have made a significantly bigger issue if it was raising money for such an acquisition.Roger Faxon, the chief financial officer, said the offering was the continuation of a "strategy aimed at repositioning and extending the maturity of our debt".
He went on to say that future debt restructuring could not be ruled out. The bonds will fall due in 2010.The issue comes after rumours circulated last week that EMI could be about to enter merger talks with AOL Time Warner's music arm, Warner Music. The music company EMI became the latest in a long line of companies to take advantage of cheap funding through convertible bonds by raising $243m (£153m) yesterday. The coupon on the bonds will be 5.25 per cent, payable semi-annually, and the conversion price will be 193.38p, a premium of 40 per cent to the reference price. Ebitda profits have risen from £31m in 2000 to an expected £75m or £80m for this year, which should justify a valuation of some £900m.While the famous waxworks in Baker Street, London, is still the core of the business, it has added three British outdoor theme parks to its collection: Alton Towers, in the Midlands, and Chessington World of Adventures and Thorpe Park, both in Surrey.CDC owns a majority stake in Tussaud's, having distributed equity to the present management and to Hans Jurgen Tiemann, who sold a German theme park, Heide Park, to the group two years ago.. "Lazard has been appointed to examine all the options," said a source close to the situation, "and at this stage nothing has been ruled out".No deal will be completed until next year, as Tussaud's management and CDC want to base decisions on the group's accounts for calendar 2003. It now operates 13 attractions, twice as many as in 1998, and has a one-third stake in the London Eye.Lazard, the investment bank, this week won the mandate to advise on the sale after competing with six other banks. Charterhouse Development Capital (CDC) is considering selling Madame Tussaud's, the waxworks museums and theme park operator, to another private equity group. This is one of the options, along with a trade sale and a stock market flotation, which Charterhouse's Gordon Bonnyman is considering as a means of realising several hundred million pounds. CDC bought Tussaud's from Pearson, the publisher, five years ago for £352m in debt and equity and it has since invested another £300m in expanding the group overseas to New York, Las Vegas, Hong Kong and, most recently, Germany. On the flip side, a bond rally could return some funds to this sector and deliver a sell-off in gold.". But also we feel that geo-political stimulus is playing a greater role than we had previously envisaged."Mr Moore said that substantial producer de-hedging, contracting mine supply, increased interest from non-traditional sources, gold's inverse relationship with the dollar and ongoing geo-political uncertainty had all led to a renaissance in gold's role as an investment.Gold has strengthened recently despite a generally stronger US dollar and has shown solid price growth in the face of a record long speculative position on New York's Comex gold futures market. Bullion prices have also held strong despite evidence of a US economic recovery. |
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