National Express is expected to announce its controversial rights issue today as Renfe, the Spanish state rail operator that has been linked with the company’s former East Coast franchise, confirmed that it was planning to enter the British market.

The rights issue, to be pitched between £300 million and £400 million, has been in the making for months as the transport company looks to raise the £350 million needed to pay down a portion of its £1.2 billion debt by the end of the year and avoid breaching banking covenants. Morgan Stanley and Merrill Lynch are acting as advisers.

The fundraising has proved contentious as the Cosmen family, from Spain, the company’s largest shareholder, with a 19 per cent stake, has called on National Express to outline its strategy before launching the rights issue.

Other investors, notably M&G, have backed National Express management, who walked away from merger talks with Stagecoach last month in favour of the fundraising.

Meanwhile, Teófilo Serrano Beltrán, president of Renfe, told The Times that the rail operator could bid for UK franchises. “This is a preliminary stage and we have not made any business study, but in the medium to long term we would consider bidding for any franchises,” he said. “Britain is a market which interests us.”

Renfe has been linked with a bid for the loss-making East Coast Mainline rail service, but Mr Serrano said until the East Coast franchise came up for tender in 2011, Renfe would make no move.

The Government said last week that it would take over the East Coast line from National Express on Friday. Lord Adonis, the Transport Secretary, said that the Government would keep the franchise until 2011, when a new operator would be found.

The Department for Transport has been in discussions with National Express, which operates two other franchises, East Anglia and c2c — between London and south Essex — since July 1, when the Government announced plans to take over the rail operator’s East Coast contract. The search for a new operator will begin next year.

Speaking in London yesterday, Mr Serrano said that Renfe would be interested in collaborating with the UK Government in a possible high-speed rail link. “Of course we would be interested in working with the British Government. At present, the Spanish Transport Minister has had talks with the British. We have not been in talks yet,” Mr Serrano said.

The high-speed line between St Pancras and Ashford, in Kent — a 30-minute journey at 140mph — opened in June and plans are under way for a second line.

High Speed Two, a company charged with assessing possible high-speed routes in the UK, is due to report before the end of the year. It is thought that a line could open between London and the West Midlands by 2025.

Spain’s Socialist Government has promoted the breakneck expansion of the AVE network through Spain.

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