Alstom considering capital increase, job cuts; shares slide again

Alstom tumbled on Wednesday as it said it was considering a range of options to accelerate its deleveraging, including asset disposals, a capital increase and job cuts.

The train maker - whose shares tanked last month after it warned that free cash flow was set to turn negative this year - said the asset disposal program was intended to generate proceeds of between €500m and €1bn.

It also announced plans to cut around 1,500 jobs to reduce overhead costs. In addition, it won’t be proposing a dividend for the fiscal year 2023.24.

Alstom said it was looking to cut debt by €2bn by March 2025.

In its cash flow warning last month, the company highlighted a rolling stock program delay in the UK and order intake delays. It guided to a range of negative free cash flow of €500m to €750m, having previously said it would be "significantly positive".

In its preliminary results for the first half, Alstom said free cash flow was negative €1.15bn, compared to negative €45m in the same period a year earlier.

Chairman and chief executive Henri Poupart-Lafarge said on Wednesday: "The negative free cash flow of Alstom during this first half is a clear call for change. While demand remains sustained, despite some volatility, our commercial performance has been soft. The Bombardier Transportation integration continues to progress. However, the delivery of Aventra program has been more complex than anticipated. Production and sales growth is accelerating.

"We are undertaking a comprehensive action plan to maintain our investment grade rating and secure our mid-term objectives. Confident in the strength of our backlog and on the solid business foundations of Alstom, I’m fully committed to take up this challenge."

At 1030 GMT, the shares were down 18.6% at €11.54.