Alstom shares up on capital increases

12th August 2004, Comments 0 comments

PARIS, Aug 12 (AFP) - Struggling French heavy engineering group Alstom has raised EUR 1.75 billion through two simultaneous capital increases.

PARIS, Aug 12 (AFP) - Struggling French heavy engineering group Alstom has raised EUR 1.75 billion through two simultaneous capital increases.  

The amount was well below its original target of EUR 2.2 billion but investors reacted positively and its shares jumped nearly 19 percent.  

The new shares would begin trading here on Friday, the company said in a statement.   The first phase of the capital hike offering preferential subscription rights was 115 percent subscribed and raised a total of EUR 1.5 billion.  

The second, a debt for equity swap aimed at certain creditors was 38 percent subscribed and raised EUR 240 million compared to a maximum EUR 635 million originally announced.   Alstom said the creditors were offered the new stock at EUR 0.5 per share.   It said due to the success of the preferential subscription rights offering, state-owned creditor Caisse Francaise de Developpement Industriel (CFDI) received only 10.4 percent of the 600 million shares it had requested.  

Alstom said after the operation the state would hold 21.4 percent of the company, compared to the maximum 31.5-percent stake allowed under a plan cleared by the European Union.  

Shares in Alstom were sharply higher in late morning trade as the market reacted positively to the details of the company's capital hike, dealers said.   Shortly before mid-day, Alstom shares were showing a gain of EUR 0.06 or 18.75 percent to EUR 0.38, while the CAC-40 index eased 0.20 percent to 3,495.86 points.  

"The capital hike was well subscribed by other creditors than the government and it looks like the company has until 2007 to restructure its operations and generate free cash flow again," one Paris analyst said.  

Sharesholders approved a refinancing plan for Alstom, which builds high-speed trains, ships and power generators, in early July after the plan was thrashed out by the French government and European Union competition authorities.

 

© AFP

 

Subject: French news

 

 

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