Press releases

Arriva plc (“Arriva”), the European transport services group, has agreed the sale of its car and commercial vehicle rental division, Arriva Vehicle Rental (“the business”), to Northgate plc for an estimated consideration of £129 million, representing a surplus over net assets of approximately £23 million.

Completion of the transaction is subject only to a share placing by Northgate becoming unconditional, and is expected to take place in the next few days.

The disposal of the business is part of Arriva's strategy of being focused on the passenger services markets in the UK and mainland Europe. The proceeds will be applied initially towards repayment of debt and will significantly strengthen the balance sheet at a time when the Group is pursuing acquisition and franchise opportunities that will strengthen its presence in key markets.

Bob Davies, Arriva's chief executive said:

The sale of Arriva Vehicle Rental is at the right price and the right time. It enables us to focus even more strongly on developing our passenger services businesses. Our strategic goal remains recognition as the number one transport services provider in Europe, where we see substantial scope for profitable investment. Northgate is ideally placed to take the AVR business forward, as the UK's leader in commercial vehicle rental.

Arriva Vehicle Rental operates from 33 branches in England and had a fleet of more than 11,000 vehicles at 31 December 2005. In the year to 31 December 2004, the business made an operating profit of £12.6* million on revenue of £59.0* million. In the six months to 30 June 2005 it made an operating profit of £5 million on revenue of £27.9*m. Divisional net assets at 31 December 2004, were £105.1m. The estimated total cash consideration consists of £53.9m for the shares and, after settlement of intra-group balances and payment for certain assets owned by other members of the Arriva group, assumption of £75.4m of debt. £4.2m of the consideration is deferred until 30 June 2006. The final consideration is subject to confirmation through completion accounts to be prepared subsequent to the disposal. Arriva Vehicle Rental Limited, at 31 December 2004, reported gross assets of £167.8m. After eliminating intra-group items, and including the assets referred to above, gross assets were £124.m.

*restated for the introduction of International Financial Reporting Standards ("IFRS").