Alstom raising 300 million euros to fund Russia rail stake
Alstom (ALSO.PA) is launching a capital hike of up to 300 million euros ($387.15 million) to finance an investment in a Russian rail equipment firm as well as future acquisitions, the French transport and power engineering company said on Monday, Reuters reported.
The proceeds will be mainly used to fund the remaining payment of around $350 million related to a deal under which Alstom is buying a 25 percent stake in Transmashholding, Russia's largest maker of locomotives and rail equipment.
Alstom paid a first tranche of $75 million for the stake in May 2011. The remaining payment, due in October 2012, is based on the Russian firm's results between 2008 and 2011, which showed strong growth with sales reaching $3.6 billion in 2011.
The remaining cash from the capital hike could also allow Alstom to pursue small deals in the renewable energies or electricity transmission sectors, the company said in a statement.
Alstom - which makes commuter and high-speed trains, wind turbines and turbines for power stations - also said it would reconfirm its previous sales growth and operating margin outlook when it releases half-year results on November 7.
The company is targeting annual sales growth target of more than 5 percent in the next three years and a gradual improvement of the operating margin to reach around 8 percent in March 2015.
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