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23 September 2003 - A compromise rescue package for French heavy engineering firm Alstom has won the backing of the European commission's competition authorities and the majority of creditor banks.
Alstom's board were due to meet Monday night to give formal approval to a €3.2bn ($3.7bn) bailout after EU Competition Commission Mario Monti lifted the threat of an injunction, following the decision by the French government not to take a direct stake in Alstom. Instead, banks and the government will instead buy some of the firm's debts.
The EU said the concessions made by France were satisfactory but said the overall bailout plan would still need to be approved in the coming months. Should the Commission decide the entire aid package is illegal, Alstom will be forced to pay back the money.
Lead lenders BNP Paribas and Crédit Agricole have approved the rescue although Alstom faced resistance from a number of foreign lenders concerned by the compromise under which the French government will subscribe to a 20-year €300m loan convertible only after Commission approval.
Alstom has a workforce of 118 000 in more than 70 countries, including 28 000 in France. The company, which makes trains, gas turbines and cruise ships, has announced plans to cut jobs - including about half of its UK workforce - in an effort to stem losses.
Alstom has been hit hard in recent months by weak power markets as well as cost overruns on key projects and accounting irregularities at its US operations. Orders for the April-September period are expected to be about €7bn, 25 per cent lower than last year.
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