Investment in Alstom in free fall | “It’s still early in history,” argues the Caisse de dépôt

Dissatisfied with Alstom’s performance, the Caisse de dépôt et placement du Québec (CDPQ) says it played its “role as a shareholder” to give the French rolling stock manufacturer a boost after seeing the value of its investment multi-billionaire to sink by 73% in three years.

“This is a file that is on my desk,” said the president and CEO of the Caisse, Charles Émond, on Thursday, when questioned on the issue. Am I satisfied with Alstom’s performance currently? The answer is no. But it’s still early in the story. »

The French multinational continues to be afflicted by the cannonballs of the former railway division of Bombardier, of which it has officially owned since January 2021. CDPQ played a key role in this transaction. The nest egg of Quebecers, who owned approximately a third of Bombardier Transport, had converted its stake in Alstom in addition to purchasing shares of the French giant at a price of 40.67 euros.

This investment was then estimated at CAN 4.1 billion. On Thursday, the Quebec institution’s 17.2% stake in Alstom was worth only CAN 1.1 billion. Over the past year, the French company has seen the value of its shares collapse by 56% on the Paris Stock Exchange. On Thursday, its title closed at 11.82 euros.

Last October, Alstom had an unpleasant surprise for investors by signaling that its financial year risked ending with a hole of 750 million euros (1 billion CAN) in its cash flow. This change contrasted significantly with his previously anticipated forecast of a “significantly positive” surplus.

The world’s number two rolling stock company attributed this situation to three elements: higher stocks to support an increase in production, payments not yet received as well as a problematic contract which belonged to Bombardier Transportation. This is the “Aventra” program surrounding the delivery of 443 trains to five different customers in the United Kingdom.

“It’s a question of execution,” says Mr. Émond.

The CDPQ has two representatives — Kim Thomassin (first vice-president and head, Quebec) and Jay Walder — on the board of directors, where there are 13 directors in total. Mr. Émond explained that the Quebec institution had had its say in the changes announced since the fall.

The role of current Chairman and CEO Henri Poupart-Lafarge, in office since February 2016, will be reduced from July 2024 since he will no longer lead the board of directors. This mandate will be entrusted to the former CEO of Safran, Philippe Petitcolin.

“There is a strategic plan in which we are involved,” said Mr. Émond. There are asset sales underway to bring down [l’endettement]. It’s a matter of optimizing the capacity of factories around the world. But it is a company that is still gaining market share. »

The big boss of the Caisse reiterated that Alstom was an “investment that we want to keep for the long term” and that the integration of Bombardier Transportation began in “a complex environment” while the pandemic was giving a hard time to all companies.

In Quebec, the French manufacturer has 2,100 employees, including 950 at its Saint-Bruno-de-Montarville facilities, where its Americas head office is located. It also operates a manufacturing plant in La Pocatière, in Bas-Saint-Laurent.