Go-Ahead listing bonus for directors

DIRECTORS of Go-Ahead, the latest bus company to seek a stock market listing, are selling about 25 per cent of their shares via a placing next week that will make them millionaires, writes Russell Hotten.

The placing of new and existing shares will leave the three founders with 40 per cent of the company. The pathfinder prospectus, published yesterday, said Go- Ahead would make operating profits of not less than pounds 4m in the year to 30 June. The company will be valued at about pounds 40m.

Based in Gateshead, Go-Ahead was a pounds 3.75m management buy-out from National Bus Company in 1987. It expanded south with the purchase of bus operations in Oxford and Brighton, and about pounds 12m of the pounds 20m-pounds 25m being raised will pay off borrowings used to finance these acquisitions.

Martin Ballinger, managing director, said the placing would leave Go-Ahead without borrowings and with cash in the bank to make further acquisitions as more bus operations were privatised. He was especially interested in some of the 10 London bus franchises.

The company is the fifth largest private sector bus operator in the UK, with 1,000 buses and coaches and 3,500 staff. It has a turnover of pounds 75m. Go-Ahead also owns a taxi business in Newcastle and in 1990 it bought 20 pubs in North East England.