Alstom to sell 20-30 % stake in transport business
French power and engineering company Alstom said it would lay off 1,300 employees and sell a stake in its transport business to raise between €1-2 billion.
Chief Executive Patrick Kron said Alstom could sell a 20 to 30 % stake in its transport unit. He said different options were being analyzed, from a sale to industrial or financial partners to listing it on the stock market.
According to sources, Patrick Kron said:
"We have time, and I have no doubt on the interest of industrial and financial partners, and in the feasibility of a stock market listing if that was the option retained."
Kron said cash from such a sale would help Alstom strengthen its balance sheet and give it room for future strategic and limited acquisitions. He said the balance sheet was solid and that a capital increase was not on the agenda.
Alstom said in its financial report that during the first six months of 2013, the macro-economic conditions have remained challenging with a sluggish economic environment in mature countries and a slower growth in some emerging countries.
The group said it expected to save €1.5 billion euros on costs by April 2016, with restructuring costs of around €150 to 200 million per year.
The group stuck to its full-year targets for cash generation, low single-digit organic sales growth and a stable operating margin. And its free cash flow turned positive in the last fiscal year after two years of outflows. However, in the six months to September 30 2013 cash flow it has been -€511 million and orders were down 22 % at 9.4 billion.
Alstom's net debt rose to €3.29 billion as at September 30 from €2.87 billion the same period a year ago. First-half net profit fell 3 % to €375 million on sales of €9.73 billion.
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