The European Commission (EC) has approved a refinancing package for the troubled French train manufacturer Alstom which meets its financial needs as well as complying with EC requirements.
The new aid plan of 3.2 billion Euros, which has been increased from an original 2.8 billion Euros includes a French state contribution of 800 million Euros, from which 300 million Euros will be convertible into shares. There will also be long-term measures, with equity increase and loans over 15 years, worth 1.7 billion Euros. Finally, short-term facilities will be increased to 1.5 billion Euros, subject to EC approval.
Alstom’s board has approved the package and now awaits shareholder approval at an Extraordinary General Meeting on 18 November 2003.
While pleased with the deal, Patrick Kron, Alstom’s Chairman & CEO said that the period of uncertainty surrounding the future of the company had had a negative impact on the company’s orders, which will lead it to expect disappointing financial results for the first half of the current fiscal year.
Alstom shares are lower, having been suspended for the past four days.