Alstom's Cost-Saving Measures to Improve Financial Situation

Alstom, the French train maker, has unveiled its plans to improve its financial situation by implementing a series of measures aimed at reducing debt and increasing profitability. These measures include a significant reduction in workforce, the elimination of dividend payments, and the exploration of various options to accelerate debt reduction.

Workforce Reduction and Dividend Elimination

As part of its cost-saving plan, Alstom intends to cut approximately 1,500 full-time equivalent positions. This move comes after the company reported a cash burn in the first six months of the fiscal year. Additionally, Alstom has decided to suspend dividend payments until further notice.

Exploring Debt-Reduction Options

To expedite its debt-reduction goals, Alstom is considering equity and equity-like issuances, as well as a potential capital increase. These options will further bolster the company's efforts to improve its financial standing.

Governance Overhaul for Accountability

Alstom recognizes the need for improved accountability and financial discipline. Therefore, the company plans to revamp its governance structure. It aims to propose Philippe Petitcolin, former Safran Chief Executive, as a director and subsequent Chairman, thereby separating the roles of Chairman and CEO. Henri Poupart-Lafarge will continue to serve as the CEO.

Net Debt Reduction Target

Alstom has set an ambitious goal of reducing its net debt by 2 billion euros ($2.18 billion) by March 2025. To achieve this target, the company has already initiated an asset-sale plan with a target of earning proceeds of up to EUR1 billion. Furthermore, it is exploring additional options such as equity issues and a capital increase.

As of March 2023, Alstom had over 80,000 employees, according to its annual report.