Al­stom mulls 4bn share buy­back to share­hold­ers

The Star Early Edition - - NEWS -

AL­STOM, the French company sell­ing most of its en­ergy equip­ment busi­nesses to Gen­eral Elec­tric (GE) to fo­cus on train­mak­ing, may re­turn as much as

4 bil­lion (R55.8bn) to share­hold­ers fol­low­ing the deal.

Al­stom’s board pro­posed the company kept two-thirds of the

12.35bn com­ing from GE trans­ac­tion to cut debt and strengthen its bal­ance sheet, it said in a state­ment on Wed­nes­day night. The re­main­der could be dis­trib­uted to share­hold­ers via a share buy­back.

The French man­u­fac­turer agreed to sell most of its en­ergy di­vi­sion to GE in June amid slow­ing de­mand for power plants in Europe.

Al­stom also plans to use the pro­ceeds to ex­pand its rail di­vi­sion and cre­ate en­ergy ven­tures with GE.

Share­hold­ers will vote on the deal at a meet­ing on De­cem­ber 19.

The company ex­pected to com­plete the dis­posal in the sec­ond quar­ter of next year, and would there­after main­tain a “cau­tious” div­i­dend pol­icy, chief ex­ec­u­tive Pa­trick Kron said this month.

Al­stom would look at ac­qui­si­tions in ar­eas such as sig­nal­ing and main­te­nance, he said.

Al­stom shares were up 4 per­cent as of 9am in Paris yes­ter­day. Be­fore yes­ter­day, the stock had gained 6.5 per­cent this year, valu­ing the man­u­fac­turer at 8.7bn.

The French company ear­lier this month pre­dicted ris­ing rev­enue after fis­cal first-half or­ders dou­bled to a record.

New or­ders in the six months to Septem­ber surged to e6.4bn from 2.74bn a year ear­lier, helped by a 4bn rail­way con­tract in South Africa. – Bloomberg

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