Alstom (ALSO.PA), as part of a series of initiatives to bolster its balance sheet and soothe investor concerns over debt, announced on Wednesday that it will reduce employment and sell assets. It also explores a capital raise as part of this series of efforts.
The manufacturer of trains also announced that Henri Poupart-Lafarge would step down from his position as chairman but continue to serve as chief executive officer. Philippe Petitcolin, a former chief executive officer of Safran (SAF.PA), will be put up as a candidate for the position of chairman by the board of directors of Alstom.
Since the business issued a financial warning in October, fueling investors’ anxieties over debt, Alstom’s management and shares have been under pressure as a result of this development. On the other hand, some experts believe that the decline in share price was “overdone,” and they see the liquidity troubles as brief and fleeting.
Alstom’s negative free cash flow for the year’s first half is a resounding cry for the company to make some adjustments. “Although there has been some volatility in the market, demand has remained stable; however, our commercial performance has been lackluster,” Poupart-Lafarge said.
The manufacturer of the famous TGV trains in France said it planned to reduce its workforce by around 1,500 people to assist in reaching its established mid-term objectives.
By March 2025, Alstom hopes to have reduced its net debt by 2 billion euros, equivalent to $2.2 billion. As of September 30th, it had accumulated a total net debt of 3.43 billion euros. The organization stated that it would also suggest that no dividends be paid for the current fiscal year.