Alstom announced on Wednesday that it would ask its shareholders for around 1 billion euros through a capital increase with preferential subscription rights, as part of measures to reduce its debt.

The French train manufacturer had raised the possibility of a capital increase last year, causing the share price to fall, while a cash flow warning in October had made it clear to investors that the company was struggling with debt problems.

At March 31, 2024, Alstom had a net debt of 2.99 billion euros.

The French train manufacturer posted a net loss, group share, of 309 million euros for fiscal year 2023/24, compared with a loss of 132 million euros in the previous year.

Alstom's cash flow problems are partly linked to the fact that the group inherited problematic contracts following the acquisition of Bombardier's rail activities in 2021.

Other measures to reduce debt by March 2025 include the issue of hybrid bonds for around 750 million euros, as well as asset disposals on which Alstom said it was already making progress.

In April, Alstom agreed to sell its North American conventional signaling business to Germany's Knorr-Bremse for around 630 million euros, and also sold its stake in Russia's Transmashholding (TMH).

Alstom recorded a negative cash flow of 557 million euros for the year ending March 2024, compared with a positive cash flow of 199 million a year earlier.

The company has also proposed not to pay a dividend for the past year.

(Reported by Olivier Sorgho; Stéphanie Hamel, edited by Kate Entringer)