The purchase of Combus by ARRIVA Danmark remains subject to European Union approval of the financial arrangements. If the approvals are not forthcoming by 1 April 2001, ARRIVA may choose not to proceed with the transaction.

Connex would take on the Combus operations in Copenhagen, where ARRIVA already has approximately 50 per cent of the market, and certain other smaller operations in the rest of Denmark. Connex would also take on responsibility for the related contracts, acquire the related assets and take on responsibility for about DKK 230 million (GBP19.3 million) of Combus’ outstanding debt.

In the year ended 31 December 1999, the latest date for which audited accounts are available, Combus reported operating losses of DKK 135 million (GBP11.3 million) and total losses of DKK 168 million (GBP14.1 million) on a turnover of DKK 1,097 million (GBP92.2 million). Reported net assets were DKK 78 million (GBP6.6 million). The financial results reflected its obligations under low margin and loss making contracts.

As reported in our announcement on 16 January to improve the financial position of Combus, prior to completion, The Kingdom of Denmark will introduce DKK 140 million (GBP11.8 million) of additional share capital into the company. The Kingdom of Denmark and lending banks have agreed to write off debt totalling DKK 200 million (GBP16.8 million).

Following the sale to Connex, ARRIVA anticipates it will have acquired net assets of approximately DKK 330 million (GBP28 million) before a deduction of DKK 190 million (GBP16 million) of net debt.

Bob Davies, ARRIVA’s chief executive, said: The proposed sale to Connex will leave ARRIVA as the largest provider of bus services in Denmark with nearly 50 per cent of the operations in Copenhagen and some 37 per cent of the total market. This compares with the current position where ARRIVA has over 20 per cent of the total market. Following the acquisition and subsequent deal with Connex ARRIVA will have a balanced portfolio across the country and will be operating in a more sustainable market structure.