Posted on: 01/07/2009 

National Express Group Plc, Britains biggest long-distance coach operator, said Chief Executive Officer Richard Bowker will step down while the U.K. withdrew the companys unprofitable East Coast rail franchise.

Bowker will depart on Aug. 31 to become CEO of Union Railway in the United Arab Emirates, the London-based company today said in a statement. National Express also said that the East Coast business is likely to run out of money this year.

National Express recruited Bowker in 2006 from the U.K. Strategic Rail Authority, a government body that allocated rail franchises. The company has been grappling with running the East Coast train routes that it was awarded in August 2007, before the start of the recession, and debt that it piled up acquiring Continental Auto SA, a Spanish bus company.

The transport operator is “not in default” on any of its commitments, Chief Operating Officer Ray O’Toole said today on a conference call with analysts. Bowker’s departure isn’t related to National Express’s financial problems, O’Toole added.

National Express fell as much as 37.75 pence, or 12 percent, to 271.75 pence, the biggest intraday decline since May 7, and was down 9.9 percent as of 8:21 a.m. in London trading. The stock has dropped 44 percent this year, valuing the company at 426.5 million pounds ($701.4 million).

The U.K. Department for Transport said today that it’s setting up a government-owned company to take over the East Coast service pending the selection of a new operator. The line is one of Britain’s two main long-distance rail routes, linking London’s King’s Cross station with Edinburgh via Leeds and Newcastle upon Tyne, England.