French infrastructure and transport group Alstom has announced a series of measures, including the layoffs of around 1,500 people, to reduce leverage and strengthen the company’s balance sheet. Possibility of selling assets and expansion capital.
The French company presented its accounts this Wednesday for the first half of the financial year, in which it recorded an attributable net profit of 1 million euros, following a loss of 21 million recorded in the previous year; Sales increased by 4.9%. It reached 8.443 million.
But as Alstom warned in October, the company recorded negative free cash flow of 1 billion 119 million euros in the first half of its financial year.
“Alstom’s negative free cash flow in this first half is a clear call for change,” said Alstom Chairman and CEO Henri Poupart-Lafarge, who acknowledged that business performance was weak despite continued demand.
In this way, the management announced a “comprehensive action plan” to keep its debt rating at investment grade and secure medium-term targets.
Alstom among planned measures to reduce leverage and secure medium-term earnings and cash targets will make an edit A workforce that will include the elimination of approximately 1,500 full-time jobs to reduce overall costs.
In addition, Alstom will work to strengthen the group’s balance sheet to maintain its strong and sustainable investment grade rating and aims to reduce its net debt by €2 billion by March 2025.
In this sense, the company stated that Alstom’s reference shareholders “support this plan” and are working closely with management to quickly implement the plan.
Therefore, depending on market conditions, Alstom is considering a number of transactions to accelerate deleveraging, including a divestiture program of: Assets that are currently operating and expected to generate income Between 500 and 1,000 million euros.
Likewise, the company is evaluating the possibility of issuing shares and similar issues, including refinancing certain assets, as well as increasing preferred capital to shareholders.
In all cases, the company emphasized that it remained flexible in the ordering and adjustment of the vehicles in question.
On the other hand, in terms of liquidity, Alstom reported that it signed an agreement on October 31. New line worth 2 billion 250 million euros bank international It rose to level one as a further step to demonstrate its financial flexibility.
“Alstom’s top priority is to strengthen the group’s fundamentals to support credit metrics and create lasting value for shareholders,” the company said.
Changes in an organization
On the other hand, the French company announced that at the next shareholders’ general meeting to be held in July 2024, the board of directors will recommend Safran’s former CEO Philippe Petitcolin as a board member and then chairman. board, this will mean Henri Poupart-Lafarge’s chairmanship of the board of directors will end and will retain his position as CEO.
Additionally, as part of the third phase of the roadmap for the merger with Bombardier, the group will carry out a simplification of the operational organization in the context of the announced workforce reduction.
Regarding the results of the cash outflow recorded in the first half of the year, the company began a review of its employee incentive plan, which included a condition for achieving cash-related targets. for 28,000 employees Who will benefit from the plan?