Transport group National Express warned of a £135 million hit today as it revealed plans to quit its Australian tram and train operations.
The group said it had been unable to agree revised financial terms with the Victoria state government, despite a lengthy year of discussions.
In a statement to the City, National Express said a deal would have involved "an unacceptable level of operational and financial risk" and it had therefore decided to stop providing funds.
The move means the group will be hit by £135 million one-off costs after writing down its Australian investment.
But the company said its UK bus operations had made good progress despite construction work in Birmingham, which presented "daily challenges" for Travel West Midlands.
Shares in the group were flat at 419.5p.
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