Crisis-stricken French engineering firm Alstom kicks off a five-day battle today to stave off collapse via a state bailout without breaking strict European rules on fair competition.
The European Commission yesterday blocked a state-backed rescue plan for the maker of TGV trains, gas turbines and cruise ships, but has given Paris five days to come up with a solution that would meet state aid rules before its order to suspend aid is enforced.
After an emergency board meeting last night, Alstom, which employs some 110,000 people, said it too was working to find an alternative rescue plan after the Commission ruling scuppered a €3.4 billion government rescue plan unveiled last month.
Alstom, which is groaning under debts of €5 billion that dwarf its equity, said an alternative plan must "address Alstom's problems in a sustainable manner" and be effective immediately.
Shares in Alstom, which have plunged 90 per cent in two years amid fears of a cash crisis, tumbled 8.5 per cent today to €2.79 before the French bourse suspended trading at the request of the company.
The firm hit hard times when it discovered a company it had bought was making faulty gas turbines and a major shipping customer went bankrupt. Poor management and a weak market for electricity generating equipment made things worse.