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Alstom to ask shareholders for $1 billion in rights issue to slash debt
Published by Uma Rajagopal
Posted on May 8, 2024
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Published by Uma Rajagopal
Posted on May 8, 2024
Alstom to ask shareholders for $1 billion in rights issue to slash debt
(Reuters) – French train maker Alstom on Wednesday said it would ask shareholders for around 1 billion euros ($1 billion) through a rights issue as part of a plan to slash debt and bring its finances back on track.
Alstom had flagged a potential capital increase late last year, sending shares tanking after a cash-flow warning in October made clear to investors it was struggling with debt.
Alstom is the world’s second-biggest train maker after China’s state-owned CRRC and has contracts on its order books from Britain for its HS2 high-speed railway and for the largest train tender in Danish rail history.
Its cash problems are in due in part due to inheriting problem contracts after the 2021 acquisition of Bombardier’s rail business.
Other measures to cut net debt by 2 billion euros by March 2025 include the issuance of hybrid bonds for around 750 million euros, announced on Wednesday, and selling parts of the business.
In April, it agreed to sell its North American conventional signalling business to Germany’s Knorr-Bremse for about 630 million euros, and it has also sold its stake in Russia’s Transmashholding (TMH).
Alstom posted a cash outflow of 557 million euros for the year to March 2024, compared to an inflow of 199 million a year earlier.
It proposed that no dividend be paid for the past fiscal year.
(Reporting by Olivier Sorgho; Editing by Tom Hogue and Christopher Cushing)