Alstom secures €2 billion credit facility as sharp cash shortfall looms
Key Facts
Alstom entered into a short-term revolving credit facility worth €2.0 billion on November 1, 2026, maturing in November 2028 and subject to no financial covenants, the company said in its preliminary results for the first half of fiscal 2026/27. The company said the facility strengthens its financial flexibility as it cuts its forecast for the current fiscal year and faces pressure on liquidity and profitability. Alstom forecast negative free cash flow of €1.5 billion in 2026/27, after previously expecting positive free cash flow. The company linked the change to delays in milestone payments resulting from extended certification schedules and delays in major projects entering commercial service. The facility comes as the company works to reduce debt and preserve its investment-grade rating.
Alstom cut its adjusted EBIT margin forecast for fiscal 2026/27 to about 1%, alongside a revision to its free cash flow forecast to a deficit of €1.5 billion. The company attributed the cash pressure to delayed milestone payments, extended certification schedules and delays in major projects entering commercial service. Those projects include Coradia Max trains, which the company said had been delayed in entering service. These factors show a direct link between execution difficulties and the timing of cash collection, as order values are not converting into cash flow as quickly as the company had expected. That puts greater focus on Alstom’s ability to restore the pace of execution and collections during the rest of the fiscal year.
Operating indicators presented a mixed picture in the first half of 2026/27, with orders received totaling €11.0 billion, up from €10.5 billion in the comparable period of the previous fiscal year. But the company’s production fell to 1,860 cars from 2,017 cars, a decline of 8%. Alstom attributed the production disruption to execution problems with the Coradia Max platform. Order growth means the flow of new business remained above its level in the comparable period, but coincided with lower production and project execution problems. Strong orders therefore did not prevent a deterioration in cash flow forecasts amid delays to certification and some projects entering commercial service.
Net debt rose to €1.1 billion on September 30, 2026, compared with €0.4 billion on March 31, 2026, the company said. Alstom said its board aims to reduce debt by about €2 billion by September 2027 as part of efforts to preserve its investment-grade rating. The target coincides with the forecast of negative free cash flow for the current fiscal year, making execution of the debt reduction plan a key focus in the coming period. The company is also tracking the effect of certification delays and projects entering service on the timing of payments and collections. The increase in net debt compared with the end of March provides direct financial context for the new facility and the announced debt reduction plan.
The forecast cuts were reflected in the stock’s trading: Alstom shares fell 25% by 11:30 GMT on November 2, 2026, putting them at the bottom of the European STOXX 600 index, according to Reuters. The company’s shares had closed at €15.81 on October 30, 2026, according to EL7 data. The decline followed the cut to its profit margin and free cash flow forecasts, while production and debt figures added to the picture of pressure facing the company. The session’s drop marked a sharp market move after the forecast revision, at a time when orders remain above the comparable period. The market is now awaiting details of the full first-half operating and financial results.
Alstom set November 17, 2026, as the date for publishing its first-half results for fiscal 2026/27, and will report third-quarter orders and sales on January 19, 2027. The company also plans to hold a capital markets day in the second quarter of 2027. The forthcoming results will provide an update on the impact of execution problems and certification delays on cash flows, as well as on the path of debt and its reduction. January’s figures will show the level of orders and sales after the forecast cuts, while the capital markets day is among the dates announced for the next phase. These milestones give investors subsequent disclosures to track developments the company linked to its current forecasts.