Alstom Considers Measures to Strengthen Finances
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.