Alstom shares slump 7.5% after Bombardier claims troubled contracts

It will take Alstom two to three years to “digest” the purchase of Bombardier Transportation, French company CEO Henri Poupard-Lafarge said during an online conference ahead of the financial results announcement. Against the backdrop of this announcement, the shares of the engineering giant sank 7.55%.

Alstom completed the acquisition of the railway division of Canada’s Bombardier in January this year. The purchase eventually cost the French side € 5.5 billion, which was paid in both cash and new Alstom shares. However, “it will take several years to create a single company,” Le Figaro quotes Mr. Poupard-Lafarge.

In two or three years, Alstom hopes to sort out the backlog of orders from Bombardier, many of which the French side assessed either as unprofitable or as difficult to implement. According to Alstom, this process will negatively affect the company’s free cash flow in the first half of the 2021-2022 fiscal year. Its volume is expected to decrease by € 1.6-1.9 billion over this period.

Kirill Sarkhanyants

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