The TGV M presented at the Alstom Belfort factory, Monday April 29, 2024 (AFP / FREDERICK FLORIN)
The railway manufacturer Alstom clarified on Wednesday how it intended to implement its 2 billion euro debt reduction plan, including a capital increase, a key step in moving forward after a difficult period.
The French group unveiled on Wednesday the two financial instruments it intends to use: a capital increase of nearly a billion euros and a “hybrid” bond issue of around 750 million euros.
The latter has the characteristic of being counted half as the company’s equity by the rating agency Moody’s, it allows it to strengthen its balance sheet.
“It is a balanced plan” whose “precise timetable and modalities will obviously depend on market conditions”, indicated CEO Henri Poupart-Lafarge during a conference for financial analysts.
These announcements, published with the annual financial results, seemed to appeal to investors: Alstom shares rose 3.87% to 16.25 euros around 3:30 p.m. in Paris, in a slightly rising market.
The last brick of the plan consists of asset sales for around 700 million, already announced. In April, Alstom indicated that it was selling its conventional signaling activities in North America to the German Knorr-Bremse AG for 630 million euros.
Believing that it has now “defined” its debt reduction plan, Alstom anticipates that it will enable it to obtain the favor of rating agencies, which assess the solvency of companies.
The manufacturer anticipates that Moody’s will associate a “stable” outlook with its Baa3 rating, a sign that it will not be lowered in the short term, after the implementation of the announced measures. Moody’s also confirmed on Wednesday its intention to “stabilize the outlook upon the successful finalization” of the operations, while immediately confirming the rating with a negative outlook.
The group’s net debt stood at 2.99 billion euros as of March 31, 2024.
– “New stage” –
These difficulties also have a social cost since the manufacturer has already announced the elimination of around 1,500 administrative positions worldwide, including around 300 in France.
Alstom is having difficulty digesting the Bombardier Transport group, purchased at the start of 2021, and had also suffered recently from the implementation of certain contracts.
It was “by definition a complicated acquisition and we knew that it would take three to four years to completely integrate” Bombardier, Henri Poupart-Lafarge admitted during a press conference.
A sign that this legacy still weighs, the group more than doubled its net loss for the staggered financial year 2023/24, to 309 million euros compared to 132 million euros a year earlier, under the effect of a certain number of exceptional charges (restructuring and integration costs, litigation, etc.), according to its results published on Wednesday.
The group’s turnover reached 17.6 billion euros, up 6.7%.
“Alstom is doing better. The company is today engaged in a new stage of its recovery, launched several months ago and of which we are seeing the first signs with our results”, promises Henri Poupart-Lafarge in Le Figaro. , who will soon cede the presidency of the group.
In fact, it was decided to separate the functions of general manager from that of chairman of the board of directors from July 2024.
Henri Poupart-Lafarge, CEO since February 2016 and reappointed to this position last July, will therefore only be its general director. To replace him as president, the former general director of Safran Philippe Petitcolin was chosen.
On the good news side, Alstom highlights its adjusted operating profit (supposed to reflect recurring operating performance) of 997 million euros, up 17%.
The order book, for its part, approached 92 billion euros, “offering strong visibility on future sales”.