Creditor banks haggle over Alstom rescue

27th May 2004, Comments 0 comments

PARIS, May 27 (AFP) - Banks owed money by engineering group Alstom were negotiating on Thursday over their part in a rescue unveiled on Wednesday and also over guaranteeing the group's contracts with customers.

PARIS, May 27 (AFP) - Banks owed money by engineering group Alstom were negotiating on Thursday over their part in a rescue unveiled on Wednesday and also over guaranteeing the group's contracts with customers.

A banking source told AFP that "the negotiations have made progress since yesterday evening but have not succeeded totally".

French Economy, Finance and Industry Minister Nicolas Sarkozy met the banks late on Wednesday to urge them to accept the rescue that he had negotiated with EU competition authorities and which includes a proposal for banks to convert debt into equity.

Creditor banks may convert up to a total of EUR 700 million (USD 840 million) of debt and are also being asked to underwrite a further increase of capital by the company amounting to one billion euros.

The effects of these stock issues will be to dilute the holding acquired by the state under the rescue when it converts debt into equity.

Banks are also being asked to provide bank guarantees for Alstom's commercial activities for the next two years to the extent of EUR 8 billion.

Sarkozy said on Wednesday that the banks were being asked to provide guarantees totalling EUR 10 billion for the company's customers.


© AFP

Subject: French news

 

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