Investors rebel on Alstom rescue plan

INVESTOR protection group Proxinvest is launching a campaign to have the terms of the French government-led e2.8bn (£1.94bn) rescue of engineering group Alstom redrawn.

The action group, which represents thousands of French small investors, charges that the rescue terms discriminate against minority investors.

Director Pierre-Henry Leroy also believes the government and the company's panel of more than 30 banks have been given information not available to small investors.

He suggests that Alstom may have failed to provide accurate details of its financial situation to shareholders at its annual meeting in July.

'This transaction constitutes an unequal treatment of shareholders by the banking system which, after approving abusive loans and the deplorable acquisition policy of the Alstom group kindly agrees today to provide new credits at a rate of 450 basis points [4.5%]above Euribor,' said Proxinvest.

Alstom declined to comment on the allegations.

Under the rescue plan unveiled on 6 August, individual shareholders will be hugely diluted by a e600m rights issue that will leave the French government with 31% of the group's equity.