Alstom put on GE to reduce the impact of the US fine – BBC

Alstom put on GE to reduce the impact of the US fine – BBC

Its shareholders have approved the sale of the energy business in the US group, which has granted an extension on the price.

Patrick Kron, CEO of Alstom, had to fight hard to convince small shareholders plebiscite of the sale of the energy branch to the American General Electric. At the General Meeting held on Friday in Paris, aggressive issues have blended

Among the concerns of shareholders. The fine that the group is preparing to settle in the United States to end a investigation of corrupt practices. This could amount to approximately EUR 550 million. Patrick Kron confirmed to be close to a deal with the US Department of Justice (DoJ): “We are in final negotiations with the DoJ, they should result in the near future, he assured. Every fine remains Alstom load. Its overall impact would however not significant and should not exceed 1% to 2% of the value of the transaction. “Either between 120 and 250 million euros on euro 12.35 billion General Electric will pay for energy activity and central services of Alstom.

In the late deal signed with Alstom in June, the US group is committed to pay any fine. But if an agreement with the DoJ is found before the closure of the acquisition, scheduled for spring 2015 is the French group to resolve it. Patrick Kron yet ensures that the final amount of the charge will be lessened Alstom “with more”. In this case, “various commercial contracts that General Electric has signed with Alstom, including the use of the mark”, the fruits will be added to 12.35 billion euros.

Alstom shareholders were also concerned about the future of the three joint ventures with GE planned to convince the government to accept the assignment. In particular, they attacked Patrick Kron on the balance of power, while Alstom will be a minority in joint ventures, chaired by GE.

“Governance is balanced, defended Patrick Kron. However, it is essential that the joint ventures are directed and inserted into a broader set for critical mass. “The CEO of Alstom was most pleased to have obtained the possibility that Alstom may sell its shares to GE in three joint ventures at a guaranteed price between September 2018 and September 2019: “We will have a floor price, the entry price, plus a premium of 2% and 3% interest per year.”

Last source wrath of small investors: the premium of EUR 4 million granted to Patrick Kron. “This conditional and exceptional remuneration for work that had nothing obvious will be submitted to the General Meeting of 30 June 2015,” said Jean-Martin Folz, in charge of the Compensation Committee of the Board of Directors. Patrick Kron confirmed that he would step down at the end of the operation.

Some shareholders criticized his record, recalling his promise in 2003, when he had just become president, “not to sell apartments by Alstom.” And stressing that this is what he ended up doing. “It is not I who am selling is you,” replied Patrick Kron. Obviously very convincing: shareholders voted 99.18% in favor of the transaction

!