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Alstom detailed on Wednesday its plan to reduce debt and reform its finances, including a capital increase of around 1 billion euros with maintenance of preferential subscription rights.
The group’s two main shareholders, the Caisse de dépôt et placement du Québec (CDPQ) and Bpifrance, which hold stakes of 17.4% and 7.5% respectively, have agreed to subscribe to the capital increase, said Alstom.
The French train maker last year raised the possibility of a capital increase, sending the stock tumbling, while a cash flow warning in October made it clear to investors that the company was struggling with debt problems.
Alstom shares rose 2.46% at 09:31 GMT on the Paris Stock Exchange, after climbing up to 10% earlier in the morning.
Jefferies analysts said they expected a better performance from the group for the second half of the fiscal year and estimated that forecasts of cash inflows for the year of between 300 and 500 million euros “look good”.
Alstom reported a negative cash flow of 557 million euros for the year ending March 2024, beating analysts’ expectations of 632 million euros in a survey provided by the company.
The group’s cash flow problems are partly linked to the fact that Alstom inherited problematic contracts after the 2021 acquisition of Bombardier’s rail operations.
“We knew it took three, four years to fully integrate (the acquisition),” Alstom CEO Henri Poupart-Lafarge said in a phone call with the press.
The plan detailed on Wednesday, which also includes the issuance of hybrid bonds for an amount of around 750 million euros, and asset sales already announced for an amount of around 700 million, would bring in around 2.45 billion euros, according to Reuters calculations.
Such a sum would exceed the target of reducing net debt by 2 billion euros by March 2025.
Henri Poupart-Lafarge also told analysts in a conference call that there could be other asset sales, beyond the debt reduction plan, and that the group would also monitor potential acquisitions.
The CEO added that the debt reduction plan is expected to be executed in the first half of the fiscal year.
Alstom posted an increase of 6.7% in its annual turnover to reach 17.62 billion euros.
(Report by Olivier Sorgho; French version by Stéphanie Hamel, edited by Kate Entringer)