Alstom's rickety structure

18 June 2004 By Hugo Dixon Follow @hugodixon

The French engineer’s current E1.8bnplus bailout may be in the bag although the underwriters won’t be happy with the share price slide. But if Alstom can’t stop clients cancelling orders, it will be staring at bankruptcy. Siemens might then have another chance to break it up.

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Alstom said it was not changing its guidance after warnings contained in its annual report sent the French engineer's share tumbling.

Alstom said in the report that uncertainties linked to our financial situation have led certain clients to defer or cancel orders.

It went on to say: If our orders do not improve in a lasting way, we could be forced to take new restructuring measures and incur additional costs in order to reach acceptable operating margin levels, which could have a significant negative effect on the results of our operations, our financial situation and our outlook.

Alstom said in a press release a few hours later that it reiterating its previous targets of 6% operating margin and positive free cash flow in 2005/2006.

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