Shares in National Express, the bus and rail group, fell 3 per cent today amid concerns about whether the Cosmen family, the group's largest shareholder, would support a planned £360 million rights issue.

The company, which is due to relinquish control of its key East Coast main line franchise on Friday, outlined today plans to raise £360 million to pay down its £1.2 billion debt mountain.

It will offer seven shares for every three held by investors at a heavily discounted price of 105p compared with last night's closing price of 338p.

It also vowed to fight any attempt by the Department for Transport (DfT) to take control of its two remaining rail franchises.

Last month the Cosmen family, from Spain, responded angrily when National Express abandoned its merger talks with rival Stagecoach. They questioned the company's direction in a public statement, saying that it was "concerned there has not been a sufficiently full and thorought assessment of all the available options".

The family has also called for the appointment of new independent advisers.

John Devaney, the executive chairman of National Express, said: "The extraordinary general meeting requires a 50 per cent vote. We do not know which way the Cosmens will vote but we are confident we will get the 50 per cent."

Mr Devaney said that the rights issue would "significantly reduce the group's net debt to a more sustainable level and allows management to focus on value creation for shareholders rather than short term debt management".

In its statement the group noted that Jorge Cosmen ... "has advised the board that he feels, in accordance with his duties as a director of the company that the rights issue is not in the best inerests of the company and all shareholders", while adding that "for the avoidance of doubt Mr Cosmen has joined in accepting responsibilty for the information contained in the rights issue prospectus".

If the Cosmens do not take up their rights, questions are certain to be asked about their commitment to the company and whether they would sell out.

The Cosmen family and CVC Capital Partners, the private equity group, approached National Express in September with a £765 million offer worth 500 pence a share, but walked away the following month after examining the company’s books.

National Express announced in July that it would walk away from the contract for the East Coast, which runs from London to Edinburgh via Leeds, York and Newcastle, after informing the Government that the franchise would run out of money this year.

Lord Adonis, the Transport Secretary, promptly decided to take the line into public hands and threatened to take away the group's two other franchises — National Express East Anglia and its c2c franchise, between London and south Essex.

He said that it was "simply unacceptable ... to reap the benefits of contracts when times are good only to walk away from them when times become more challenging."

In its statement today National Express said that it has "taken and received advice from leading legal counsel ... on the basis of that advice it considers it may have grounds to challenge any purported declaration by the DfT of cross default."

It added: "Whilst the group will therefore oppose any attempt by the DfT to assert any purported right of cross default, it nonetheless remains open to further discussions with the DfT with the objective of safeguarding the interests of all stakeholders."

It revealed that if the two franchises were stripped from it, it would face an £81 million bill.

Lord Adonis said on Friday that the Government will keep the East Coast franchise until 2011, when a new operator would be found.

National Express shares were trading down 9.5p or 2.81 per cent at 328.50p.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive