Cash call as Alstom freezes top pay

ALSTOM, the international power industry and transport engineering group, kicked off its e2.1bn (£1.3bn) financial restructuring today with a e636m, four-for-13 rights issue in a bid to put the struggling group's balance sheet back in shape.

Alstom, quoted in Paris but best-known in Britain as a supplier of rolling stock to the UK's train operators, earlier this month reported its first-ever loss, a net deficit of e139m, and slapped a pay freeze on its embarrassed executives.

The fully underwritten rights issue, which is being marketed by French bank BNP and JP Morgan, is the first part of a plan aimed at reducing the group's e2bn debt pile. Alstom chairman and chief executive Pierre Bilger said the issuing of the new shares plus non-core business and property disposals will raise e2.1bn in the current financial year.

Its losses in the last financial year were down to delays on five separate train contracts, problems with the construction of energy turbines and the bankruptcy of Renaissance, the cruise liner group, to which it was heavily exposed.

In Paris, shares in Alstom, which used to be co-owned by Marconi forerunner GEC, fell 3% to trade at e12.50.