The French company Alstom left the shareholders of Transmashholding

Alstom withdrew from the shareholders of Transmashholding (TMH), selling its 20% to Russian shareholders at half price. The company remained among the owners of TMH for a long time and, although it stopped supplies of equipment to the Russian Federation in March 2022, it was only in the fall of 2023 that it announced the inevitability of selling the share. According to analysts, Alstom’s exit, even at a low price, is natural and will not harm TMH.

Russian shareholders of Transmashholding (TMH) in January closed a deal to buy out 20% of their shares from the French Alstom, reports “RIA News” with reference to Kirill Lipa, CEO and co-owner of TMH. The top manager did not name the amount, saying only that the ransom was made “for half the objective cost,” and the calculations were made in rubles. The stake was distributed evenly among shareholders, he added. Next, the redomiciliation of Transmashholding in the Russian Federation is expected, which will be completed in March-April, Mr. Lipa explained.

TMH shareholders who own it through the Cyprus Transmashholding Limited are Andrey Bokarev, Iskandar Makhmudov, Dmitry Komissarov and Kirill Lipa. TMH produces traction rolling stock, passenger cars, electric trains and metro cars. TMH’s revenue according to RAS at the end of 2023 increased by 23%, to 135 billion rubles, net profit amounted to 14.2 billion rubles. against a loss of 4.2 billion rubles. a year earlier. The revenue of the entire group exceeded 400 billion rubles. and increased by 30%. Sales of locomotives grew by 11%, to 974 sections, electric trains – by 31%, to 693 cars, locomotive-hauled passenger cars – by 20%, to 957 units, the production of subway cars grew the most – by 37%, to 503 units.

Alstom stopped selling trains in the Russian Federation back in March 2022 (see. “Kommersant” dated March 9, 2022), but then did not sell 20% in TMH, explaining that there was “no significant business or operational connection” with it.

For more than a year, Alstom has been characterized as a “dormant shareholder”. However, in October 2023 was announcedthat Alstom is leaving TMH because the latter was included in the SDN list.

Analysts noted then that Alstom’s exit would be relatively painless, since the EP20 passenger electric locomotives, which Alstom took part in the development of ten years ago, are produced in small quantities and can be easily replaced. Also, the holding’s portfolio does not contain any products produced under a license from a foreign developer.

Alstom is also the manufacturer of four seven-car Allegro trains, which have been running between St. Petersburg and Helsinki since December 2010 and could have operated until 2041 if their service had not been interrupted at the end of March 2022 due to the outbreak of hostilities. Subsequently, the Finnish VR bought out the share of Russian Railways in the joint venture Karelian Trains, which owned the trains, and announced their entry into routes in Finland.

The French company is facing financial problems: in October 2023, Alstom forecast negative free cash flow of €500–750 million for the financial year ending March 2024.

Having received a symbolic net profit of €1 million in March-September 2023 with a debt of €3.4 billion, the company in November 2023 announced its intention to lay off 1.5 thousand employees and sell assets worth €1 billion to reduce debt by the beginning 2025. Over the past year, the company’s shares have fallen in price by half, to €12.15 per share.

The head of Infoline-Analytics, Mikhail Burmistrov, says that the value of TMH is quite difficult to estimate, since with large assets the profitability of sales is limited due to the heavy dependence on a single buyer (JSC Russian Railways), and the debt burden is high. Thus, the ratio of net debt to EBITDA reached 4.4 in the first half of 2023. In his opinion, Alstom’s exit after record revenues in 2023, even taking into account the inevitable discount, is completely justified, because the moment for forming an assessment of the shareholding is optimal, there are no prospects for continuing cooperation with TMH today, and sanctions risks are growing. At the same time, this is a very attractive deal for TMH shareholders.

Natalya Skorlygina