Alstom SA: Alstom launches its share capital increase with preferential subscription rights of an amount of approximately €2 billion as part of the financing of the acquisition of Bombardier Transportation

Not to be published, distributed or circulated directly or indirectly in the United States, Australia or Japan.This press release is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any Alstom securities in any jurisdiction.Alstom launches its share capital increase with preferential subscription rights of an amount of approximately €2 billion as part of the financing of the acquisition of Bombardier Transportation November 16, 2020Terms of the transactionSubscription ratio: 3 new shares per 10 existing sharesSubscription price: €29.50 per new share; theoretical value of the preferential subscription rights: €2.90Preferential subscription rights trading period: from November 17^th to November 26^th, 2020, inclusiveSubscription period: from November 19^th to November 30^th, 2020, inclusiveFollowing the signing of the sale and purchase agreement with Bombardier Inc. and Caisse de dépôt et placement du Québec (“CDPQ”) for the acquisition of Bombardier Transportation (the “Acquisition”) on September 16^th, 2020 under revised terms, and the approval at Alstom’s Shareholders’ Meeting held on October 29^th of all resolutions related to the Acquisition, Alstom reaches today a key milestone in the acquisition process, with the launch of its share capital increase with shareholders’ preferential subscription rights in an amount of approximately €2 billion (including issue premium).The proceeds of the rights issue will be used to finance in part the Acquisition price which is expected to amount to up to €5.3 billion¹. The rights issue is part of the total equity financing of approximately €5 billion that also includes capital increases reserved for CDPQ and Bombardier Inc., in minimum amounts of €2.63² billion and €500³ million, respectively. A bond issue in an amount of approximately €400 million is also being contemplated.The Acquisition announced on February 17^th, 2020 will enable Alstom to accelerate its strategic roadmap by bringing together complementary commercial, products and industrial platforms and represents a key milestone in the strengthening of Alstom’s operational profile. With a significant broader reach, a larger portfolio of solutions and enhanced innovation capabilities, Alstom will be in an ideal position to respond to the increasing demand for sustainable mobility.With an objective to restore Bombardier Transportation’s margin at a standard level in the medium-term and to generate €400m synergies in annual run-rate synergies by the fourth or fifth year post-closing⁴, the Acquisition should be strongly value-creative for the Group’s shareholders, with an expected double digit EPS accretion as from the second year post-closing⁵.The Acquisition will also enable Alstom to welcome CDPQ as a new long-term shareholder, who will become Alstom’s largest shareholder with approximately 17.8% of the share capital.The Acquisition is expected to close in Q1 2021 subject to regulatory approvals and customary closing conditions. As of the date of this press release, all applicable competition authorities have authorized the Acquisition other than those in China and South Africa whose review is ongoing.”We are now entering the final stretch of the acquisition of Bombardier Transportation, the completion of which is now expected to occur in Q1 2021. Alstom’s core purpose is to develop mobility solutions that are more respectful of the environment for the wellbeing of all, and thus to improve quality of life in our cities and lands. The acquisition of Bombardier Transportation is at the heart of this strategy. Along with Alstom’s and Bombardier Transportation’s employees, we are going to build a world leader extremely well positioned to have a significant impact on the future of mobility, and at the same time create strong value for all stakeholders. We are pleased to offer as of today to Alstom’s shareholders and to investors the opportunity via this circa €2 billion rights offering to participate in this key milestone of the Group’s development.”, said Henri Poupart-Lafarge, Alstom’s Chairman and Chief Executive Officer.
                            
Key terms of the rights issue
The rights issue will be carried out with preservation of the shareholders’ preferential subscription rights, pursuant to the 4^th resolution of the combined general meeting of October 29^th, 2020, and will result in the issuance of 68,077,926 new shares at a subscription price of €29.50 per share (i.e., a nominal value of €7 plus an issue premium of €22.50), to be fully paid up upon subscription, representing gross proceeds, including the issue premium, of €2,008,298,817 (which may be increased to a gross amount, including the issue premium, of €2,009,623,397, by issuance of 68,122,827 new shares in the event of exercise of all currently-exercisable share subscription options of the Company⁶).Holders of existing shares recorded on their accounts as of the end of the accounting day on November 16^th, 2020 will be entitled to receive preferential subscription rights which will be detached from the underlying existing shares on November 17^th, 2020. Existing shares will therefore trade ex-right from November 17^th, 2020.Each existing share will entitle its holder to receive one (1) preferential subscription right. 10 rights will entitle holders to subscribe for 3 new shares on an irreducible basis (à titre irréductible), at a subscription price of €29.50 per share.Subscriptions on a reducible basis (à titre réductible) will be accepted. Any new shares not subscribed on an irreducible basis (à titre irréductible) will be distributed and allocated to the holders of the rights having submitted additional subscription orders on a reducible basis (à titre réductible) subject to reduction in the event of oversubscription.Based on the closing price of Alstom stock on the regulated market of Euronext Paris (“Euronext
Paris”) on November 12^th, 2020, i.e. €42.06:the theoretical value of 1 preferential subscription right is €2.90 (this value may fluctuate during the rights trading period, in particular depending on changes in the price of Alstom share)the theoretical value of the ex-right share is €39.16the subscription price for the new shares of €29.50 per share (representing a nominal value of €7 plus an issue premium of €22.50) reflects a discount of 24.7% to the theoretical ex-right share price and 29.9% to the closing price on November 12^th, 2020             
The only offer to the public in the context of the rights issue will be in France.Subscription intentions
Bouygues, which owns 9.7% of Alstom’s share capital, committed towards Alstom to participate in the rights issue in a “tail swallow” transaction (“operation blanche”) by selling part of its preferential subscription rights to cover the cost of taking up the remainder exclusively with the proceeds of this sale. Upon completion of this transaction, Bouygues is expected to hold approximately 8%⁷ of Alstom’s share capital. ⁸