PARIS - Alstom 's (EPA:ALSO) stock experienced a sharp decline today, falling by 11% to €12.55 in early trading hours, following the company's announcement of potential equity issues and a capital increase. The move is part of a broader strategy to stabilize the company's finances and reduce net debt by €2 billion ($2.18 billion) by March 2025.
The French multinational, known for its role in the rail transport industry, outlined a multi-faceted approach to achieve its financial goals:
- An asset-sale program aiming to generate between €500 million and €1 billion.
- Refinancing of selected assets.
- Equity issuances.
- A planned capital increase.
In addition to these financial measures, Alstom has launched a cost-saving plan that will affect approximately 1,500 full-time positions. Despite these job impacts, the company has transitioned to net profit buoyed by a significant increase in sales for the half-year period that ended on September 30.
Analysts have mixed reactions to Alstom's announcements. While Jefferies analysts have shown support for the company's strategic moves, Citi analysts have expressed concerns over potential share volatility stemming from the uncertainties tied to the capital increase. As Alstom navigates these changes, investors and market watchers will be closely monitoring the effectiveness of its stabilization efforts and their impact on the company's financial health and stock performance.
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