Alstom in first half red after GE power deal

5th November 2015, Comments 0 comments

French industrial group Alstom swung into the red in the first half of the year, partly due to the ceding of power business assets to General Electric.

However the group's decision to focus largely on transport looks to be paying off, despite an overall loss of 57 million euros ($63 million) compared to a net profit of 255 million euros in first half 2014.

Net energy-related losses came in at 75 million euros whereas transport brought an 18 million gain.

In mid-afternoon Paris trading Alstom shares had slumped 5.76 percent to 29.205 euros.

Alstom said Wednesday it would undertake a 3.2-billion-euro share buyout following the energy assets sale to GE. Under the offer, 91.5 million shares, amounting to 29.5 percent of capital, will be repurchased at 35 euros apiece and then cancelled under a strategy to refocus the company, it said in a statement.

A shareholders' general assembly is scheduled for December 18.

On Monday, GE said it had finalised a 9.7-billion-euro deal to acquire Alstom's energy assets. The latter is best known as the maker of the high-speed TGV train.

Alstom put part of its half-year loss down to the costs of separating the assets bound for GE as well as "high transitory financial costs as well as specific depreciation charges."

The group's market capitalisation is 9.2 billion euros based on Tuesday's market close. If the share buyout offer, which closes on January 28, is fully subscribed that will drop to six billion euros.

Alstom chairman and chief executive Patrick Kron meanwhile denied persistent rumours of a potential merger with Canada's Bombardier.

"We are concentrated on organic growth and will only be interested in acquisitions if that allows us to reinforce our strategy and development," said Kron.

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© 2015 AFP

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