Alstom is considering equity issues, asset sales, and cost reductions to strengthen its finances and reduce debt. The company aims to improve its financial situation by March 2025.
Alstom experienced a significant drop in its shares following the announcement that the company is exploring options such as equity issues and a capital increase to improve its financial situation. As of 8:34 AM GMT, Alstom shares plummeted by 11% to EUR12.55.
The French train manufacturer intends to reduce its net debt by EUR2 billion ($2.18 billion) by March 2025 and is actively exploring various transactions to expedite the process. These include implementing an asset-sale plan, generating proceeds of between EUR500 million and EUR1 billion, as well as equity and equity-like issuances through the refinancing of certain assets and a potential capital increase.
Simultaneously, the company has initiated a comprehensive cost-saving initiative that will impact approximately 1,500 full-time positions. Alstom's financial report for the six months ended September 30 revealed a positive shift, as higher sales contributed to a net profit.
Jefferies analysts view Alstom's plans for asset sales and cost reductions favorably, emphasizing their potential benefits. However, Citi analysts expressed concern over the company's ambiguity regarding a potential capital increase, cautioning that this uncertainty may lead to volatility in the company's shares until the matter is resolved.
All Rights Reserved © 2024
Leave Comment