ALSTOM SA: Alstom launches a share capital increase with preferential subscription rights for an amount of approximately €1 billion, thus executing the final step of the announced €2 billion deleverag

Alstom launches a share capital increase with preferential subscription rights for an amount of approximately €1 billion, thus executing the final step of the announced €2 billion deleveraging plan

27 May 2024 - Alstom reaches today a key milestone in the execution of its deleveraging plan, with the launch of a share capital increase with shareholders’ preferential subscription rights in an amount of approximately €1 billion (including issue premium).

Terms of the transaction

• Subscription ratio: 1 new share for 5 existing shares
• Subscription price: €13.0 per new share
• Theoretical value of the preferential subscription rights: €0.87
• Rights trading period: from May 28^th to June 6^th, 2024, inclusive
• Subscription period: from May 30^th to June 10^th, 2024, inclusive
• Pro rata subscription of CDPQ (17.4% of the share capital) and Bpifrance Investissement (7.5% of the share capital)

As announced in November 2023 and reiterated during the 2023/24 full year results on May 8^th, 2024, Alstom’s Board of Directors is committed to a conservative financial policy and to protect the Group’s Investment Grade rating, in particular through a ca. €2 billion inorganic deleveraging plan.

The share capital increase is the final step of the deleveraging plan that also includes:

• Divestments for ca. €700 million:
  • Sale of TMH for €75 million realized in January 2024
  • The announced sale of US conventional signalling business to Knorr-Bremse AG, which will generate proceeds of ca. €630 million upon closing expected during Summer 2024
• The successful placement of €750 million of hybrid bonds with 50% equity content for Moody’s¹ announced on May 23^rd, 2024.

The ca. €2.4 billion in aggregate proceeds correspond to ca. €2 billion of deleveraging, mainly due to the hybrid bond’s 50% Moody’s debt content.

Ca. €1.2 billion of the proceeds of asset disposals and of the capital markets transactions will be used to repay financial debt by September 2024:

• repayment of Neu CP of €1,033 million
• repayment of RCF drawings of €175 million

The remainder of the proceeds will be invested in highly liquid short-term investments (cash equivalent treatment) and will be earmarked for gross debt reduction at maturity.

Moody’s has reaffirmed Alstom’s Baa3 long-term issuer rating and stated that the outlook will be changed to stable upon successful closing of the hybrid bond and rights issue.

Alstom will terminate its €2.25 billion credit facility agreement following the execution of the deleveraging plan.
        
Key terms of the rights issue
The capital increase will be carried out with preservation of shareholders’ preferential subscription rights, pursuant to the 17^th resolution of the extraordinary general meeting of July 11^th, 2023, and will result in the issuance of 76,858,213 new shares at a subscription price of €13.0 per share (i.e., a nominal value of €7 plus an issue premium of €6), to be fully paid up upon subscription, representing gross proceeds, including the issue premium, of €999,156,769.

Preferential subscription rights will be detached from the underlying existing shares on May 28^th, 2024. Existing shares will therefore trade ex-right from May 28^th, 2024.

Each existing share will entitle its holder to receive one (1) preferential subscription right. 5 preferential subscription rights will entitle holders to subscribe for 1 new share on an irreducible basis (à titre irréductible), at a subscription price of €13.0.

Subscriptions on a reducible basis (à titre réductible) will be accepted. Any new shares not subscribed on an irreducible basis (à titre irréductible) will be distributed and allocated to the holders of the rights having submitted additional subscription orders on a reducible basis (à titre réductible) subject to reduction in the event of oversubscription.

Based on the closing price of Alstom shares on the regulated market of Euronext Paris ("Euronext Paris”) on May 23^rd, 2024, i.e. €18.22:

• the theoretical value of 1 preferential subscription right is €0.87 (this value may fluctuate during the rights trading period, in particular depending on changes in Alstom’s share price);
• the theoretical value of the ex-right share is €17.35;
• the subscription price for the new shares of €13.0 per share (representing a nominal value of €7 plus an issue premium of €6) reflects a discount of 25.1% to the theoretical ex-right share price and 28.6% to the closing price on May 23^rd, 2024.
  
  

These values neither presuppose the preferential subscription right value throughout the rights trading period nor Alstom’s share price ex-rights as they will be observed in the market.

The rights issue will be open to the public in France only.

Subscription undertakings        
Each of Caisse de dépôt et placement du Québec ("CDPQ”) and Bpifrance Investissement (in respect of shares held through the SLP Lac 1 fund), currently holding respectively 17.4% and 7.5% of Alstom’s share capital, has undertaken to subscribe for its respective pro-rata share of the capital increase (i.e., for a total amount of €173.8 million and €75.0 million, respectively).

Alstom is not aware of the subscription intentions of any other shareholder.

Lock-up agreements
Alstom has agreed to a lock-up period starting on the date of signing of the underwriting agreement and ending 180 calendar days after the settlement and delivery date of the rights issue, subject to certain customary exceptions.

Each of CDPQ and Bpifrance Investissement (in respect of shares held through the SLP Lac 1 fund) has agreed to a lock-up period starting on the date of approval by the Autorité des marchés financiers ("AMF”) of the prospectus relating to the rights issue (the "Prospectus”) and ending 180 calendar days after the settlement and delivery date of the rights issue, subject to certain customary exceptions.

Dilution
For illustrative purposes only, a shareholder holding 1% of the Alstom’s share capital as of May 24^th, 2024, and who does not participate in the rights issue, would hold 0.83% following the rights issue (on a non-diluted basis).

Underwriting
The rights issue, to the extent not covered by the subscription undertakings of CDPQ and Bpifrance Investissement, is being underwritten pursuant to an underwriting agreement entered into on May 24^th, 2024 with a syndicate of banks including BNP Paribas, Crédit Agricole CIB, J.P. Morgan and Société Générale acting as Joint Global Coordinators, Lead Managers and Joint Bookrunners, BofA Securities, Citigroup, Mizuho and Natixis acting as Joint Bookrunners and BBVA, CIC and Deutsche Bank acting as Co-Bookrunners. This underwriting agreement does not constitute an irrevocable guarantee (garantie de bonne fin) within the meaning of Article L. 225-145 of the French Commercial Code.

Indicative timetable of the rights issue
The preferential subscription rights will be traded on Euronext Paris under the ISIN code FR001400Q9B4 from May 28^th, 2024 until June 6^th, 2024 inclusive. It will not be possible to buy or sell the preferential subscription rights on the market after the close of trading on June 6^th, 2024. The subscription period for the new shares will run from May 30^th, 2024 to June 10^th, 2024, inclusive.

Any preferential subscription rights not exercised before the end of the subscription period, i.e. the close of trading on June 10^th, 2024, shall automatically become null and void. Settlement and delivery of the new shares and commencement of trading on Euronext Paris are expected to take place on June 17^th, 2024. The new shares will be, as from their issuance date, fully fungible with Alstom’s existing shares and will be traded under the same trading line and ISIN code as Alstom’s existing shares (ISIN code FR0010220475).

Availability of the Prospectus
The Prospectus including (i) the 2023/24 universal registration document (document d’enregistrement universel) of Alstom filed with the AMF on May 15^th, 2024 under number D.24-0413 and (ii) the amendment to the universal registration document filed with the AMF on May 24^th, 2024 under number D.24-0413-A01 and (iii) a securities note (note d’opération) (including the summary of the Prospectus) which was filed with the AMF and received approval under number 24-169 dated May 24^th, 2024 is available on the website of the AMF (www.amf-france.org) and the company (www.alstom.com). Copies of the Prospectus are available free of charge at the Alstom’s registered office (48, rue Albert Dhalenne, 93400 Saint-Ouen-sur-Seine, France).

Risk factors
Investors’ attention is drawn to the risk factors included in chapter 4 "Risk factors and risk management, control environment” of the 2023/24 universal registration document and in chapter 2 "Risk Factors” of the securities note (note d’opération).

Financial & legal advisors
PJT Partners and Perella Weinberg Partners acted as financial advisors to Alstom, Cleary Gottlieb Steen & Hamilton LLP acted as legal advisor to Alstom and White & Case LLP as legal advisor to the banks.

¹ Alstom will account for the bonds entirely as equity under IFRS

IMPORTANT INFORMATION

This press release includes "forward-looking statements". All statements other than statements of historical facts included in this press release, including, without limitation, those regarding Alstom’s financial position, business strategy, plans and objectives of management for future operations, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Alstom, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding Alstom’s present and future business strategies and the environment in which Alstom will operate in the future. Additional factors could cause actual results, performance or achievements to differ materially.

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This press release does not constitute an offer to sell nor a solicitation of an offer to buy, nor shall there be any sale of ordinary shares in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

The distribution of this document may, in certain jurisdictions, be restricted by local legislations. Persons into whose possession this document comes are required to inform themselves about and to observe any such potential local restrictions.

This press release is an advertisement and not a prospectus within the meaning of Regulation (EU) 2017/1129 of the European Parliament and of the Council of June 14, 2017 (as amended the "Prospectus Regulation”). Potential investors are advised to read the prospectus before making an investment decision in order to fully understand the potential risks and rewards associated with the decision to invest in the securities. The approval of the prospectus by the AMF should not be understood as an endorsement of the securities offered or admitted to trading on a regulated market.

With respect to the member states of the European Economic Area (other than France) and the United Kingdom (each a "Relevant State”), no action has been undertaken or will be undertaken to make an offer to the public of the securities referred to herein requiring a publication of a prospectus in any Relevant State. As a result, the securities may not and will not be offered in any Relevant State except in accordance with the exemptions set forth in Article 1 (4) of the Prospectus Regulation or under any other circumstances which do not require the publication by Alstom of a prospectus pursuant to Article 3 of the Prospectus Regulation and/or to applicable regulations of that Relevant State.

The distribution of this press release has not been made, and has not been approved, by an "authorised person” within the meaning of Article 21(1) of the Financial Services and Markets Act 2000. As a consequence, this press release is only being distributed to, and is only directed at, persons in the United Kingdom that (i) are "investment professionals” falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Order”), (ii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc.”) of the Order, or (iii) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of Article 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "Relevant Persons”). Any investment or investment activity to which this document relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. Any person who is not a Relevant Person should not act or rely on this document or any of its contents.

This press release does not constitute or form part of any offer of securities for sale or any solicitation to purchase or to subscribe for securities or any solicitation of sale of securities in the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act”) or the law of any State or other jurisdiction of the United States, and may not be offered or sold in the United States absent registration under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Alstom does not intend to register all or any portion of the Securities in the United States under the Securities Act or to conduct a public offering of the Securities in the United States.

This announcement is not, and under no circumstances is it to be construed as, a prospectus, offering memorandum, advertisement or an offer to sell or solicitation of an offer to buy any of the securities referred to herein in Canada. Any offering in Canada will be made on a private placement basis only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.

This announcement may not be published, forwarded or distributed, directly or indirectly, in the United States of America, Canada, Australia or Japan.

Alstom, as well as BNP Paribas, Crédit Agricole CIB, J.P. Morgan, Société Générale, BofA Securities, Citigroup, Mizuho, Natixis, BBVA, CIC and Deutsche Bank (together, the "Underwriters”) and any of their respective affiliates expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained in this press release, whether as a result of new information, future developments or otherwise.

The Underwriters are acting exclusively for Alstom and no one else in connection with the offer of new shares and will not regard any other person as their respective clients and will not be responsible to anyone other than Alstom for providing the protections afforded to their respective clients in connection with any offer of new shares of Alstom or otherwise, nor for providing any advice in relation to the offer of new shares, the content of this press release or any transaction, arrangement or other matter referred to herein.

In connection with the offering of ordinary shares of Alstom, the Underwriters and any of their affiliates may take up a portion of the ordinary shares as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts such shares and other securities of the Alstom or related investments in connection with the offer of ordinary shares of Alstom or otherwise. Accordingly, references in the Prospectus to the new ordinary shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by the Underwriters and any of their affiliates acting in such capacity. In addition, the Underwriters and any of their affiliates may enter into financing arrangements (including swaps, warrants or contracts for differences) with investors in connection with which they may from time to time acquire, hold or dispose of shares. The Underwriters do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

None of the Underwriters or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this press release (or whether any information has been omitted from this press release) or any other information relating to Alstom, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

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• 2024 05 27 - Alstom - Launch press release - vF