Alstom to Raise About $1 Billion to Cut Debt — Update
By Pierre Bertrand and Nina Kienle
Alstom said it plans a capital increase of about 1 billion euros ($1.08 billion) as part of its efforts to reduce debt, and that it expects to generate positive cash flows again this year.
The French train maker on Wednesday outlined details of a plan that aims to reduce its debt by EUR2 billion and that includes a hybrid bond issue of EUR750 million in addition to the capital increase, which it expects to execute no later than September.
Alstom had previously flagged a debt-reduction plan was in the works. In November, it said it would cut jobs, suspend dividend payments for the year to March and consider a capital increase in a bid to stop bleeding cash, boost profitability and bring down debt.
The company's two biggest shareholders, Caisse de depot et placement du Quebec and Bpifrance, intend to participate in the capital increase in amounts proportional to their current stakes of 17.4% and 7.5%, respectively, Alstom said.
Alstom said proceeds of about EUR700 million from recent agreements to sell its conventional signalling business in North America and its stake in Russia's Transmashholding will also contribute to its debt-reduction efforts.
"While many of the details of the de-levering plan are as expected, we think the announced actions should be well received," analysts at Citi wrote in a note to clients.
At 0917 GMT, Alstom shares traded 2.8% higher at EUR16.09, having earlier risen as much as 11%.
As of March 31, the company's net debt stood at EUR2.99 billion, up from EUR2.135 billion a year before.
Looking ahead, Alstom expects free cash flow for the year to March 2025 within the range of EUR300 million to EUR500 million, which compares with an outflow of EUR557 million in fiscal 2024. It also expects to achieve an adjusted earnings before interest and taxes margin of around 6.5% and organic sales growth of around 5%.
The company said its net loss for the year to March widened to EUR309 million from a loss of EUR132 million the year prior, partly driven by higher financing expenses.
Sales rose 6.7% to EUR17.62 billion, while orders declined 8.4% to EUR18.95 billion.
Adjusted EBIT--the company's key metric--grew 17% to EUR997 million, while its margin expanded to 5.7% from 5.2%.
Analysts had forecast Alstom's fiscal 2024 sales at EUR17.40 billion, adjusted EBIT at EUR988 million and orders at EUR18.44 billion, according to consensus estimates provided by the company.
Write to Pierre Bertrand at pierre.bertrand@wsj.com and Nina Kienle at nina.kienle@wsj.com
(END) Dow Jones Newswires
May 08, 2024 05:37 ET (09:37 GMT)
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