Alstom mulls 4bn share buyback to shareholders
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