Agreement on Revised 3.2 Billion Euro Refinancing
Package

• Financing package increased from 2.8 to 3.2
  billioneuro
• Long-term measures - equity increase and loans over 15
  years - represent over  1.7 billioneuro
• French State contribution of  800 million euro,
  of which 300 million euro to be converted into shares subject
  to European Commission approval
• Short-term facilities increased to 1.5 billion
  euro

Following the European Commission s announcement that some
aspects of the refinancing package announced on 6 August 2003
were inconsistent with the Commission s review and approval
timetable, new discussions were held over the last few days
between all the concerned parties, including the European
Commission, in order to amend the plan.

A new agreement has been reached which is designed to meet
ALSTOM's financial needs while complying with European Commission
requirements. The revised financing package was approved today by
ALSTOM s Board and will be subject to shareholder approval at an
Extraordinary General Meeting to be held on 18 November 2003. As
a consequence, the Ordinary and Extraordinary General Meeting
scheduled on 24 September 2003 will not take place.

*ORA may be increased to up to 1 billion euro, with Banks
subordinated loans correlatively reduced to 1,100 million euro.


** Converted into shares immediately following the European
Commission s review and approval



Short-term facilities, including  1.2 billion euro provided
by the French State, are increased to 1.5 billion euro to cover
ALSTOM s liquidity requirements until the new financing package
is fully implemented.

As included in the previous package, a syndicate of banks is
providing a contract bonds and guarantees facility of  3,500
million euro, counter-guaranteed in part (65%) by the French
State, to allow ALSTOM to cover its normal level of business
actvity.

Commenting on the revised package, Patrick Kron, ALSTOM's
Chairman & CEO, said: The new package provides ALSTOM with a
strong base from which to move ahead. It meets our fundamental
objectives: a substantial increase in our equity base, with the
prospect of the French State becoming a shareholder if the
European Commission, following its review, grants approval;
adequate medium- to long-term refinancing and coverage of
on-going liquidity and bonding needs.

Unfortunately, the past period of uncertainty has had a
negative impact on our order intake, which coupled with losses
identified on contracts, leads us to expect disappointing
financial results for the first half of the current fiscal
year.

Today s announcement ends uncertainty surrounding ALSTOM's
future and so should rapidly restore the confidence of our
customers, suppliers and employees and greatly improve our
commercial performance. My primary objective, together with the
management team, is to vigorously implement all aspects of the
performance improvement programme we launched in March: to reduce
our cost base, improve profitability and better serve our
customers world-wide.

 
(II) OPERATIONAL AND FINANCIAL UPDATE

Order intake

In addition to weak markets in power generation new equipment,
the Group's commercial activity has been significantly impacted
by customer concerns as to ALSTOM s future and by difficulties in
obtaining contract bonds. These factors, exacerbated by growing
uncertainty generated over the last weeks as to the
implementation of the financing package announced on 6 August,
have led to a lower level of order intake.

Orders received in the first half of fiscal year 2004 are now
expected to be around 7 billion euro, approximately 25 per cent
below the first half of fiscal year 2003 on a comparable basis
(same scope and same exchange rates).

Income and cash flow

As previously announced, a review of the projects
managed by ALSTOM's US Transport business was undertaken and has
identified additional costs to complete some contracts of
approximately 100 million euro. Other project reviews have
led management to make more conservative estimates of costs to
complete, with a corresponding negative impact on operating
income. In particular, due to the bankruptcy of two key
sub-contractors on a utility boiler contract in the US, the cost
to complete this project has been re-assessed and will lead to a
loss of approximately 50 million euro.

In the light of these developments, an operating margin of
just over 1.0 per cent is forecast for the first half of fiscal
year 2004. A net loss of around  500 million euro is
expected for this period due to the lower than expected operating
margin combined with higher financial expenses and restructuring
costs.

Free cash flow will be strongly negative in the first half
mainly as a result of a slowdown in customer deposits and
advances caused by lower orders and insufficient bonding
availability, coupled with the scheduled cash outflow from
GT24/GT26 provisions.

Disposals Programme

An agreement with Areva should be finalised shortly for the sale
of ALSTOM s Transmission & Distribution (T&D) activities
for an enterprise value of  950 million euro, subject to
closing adjustments, with closing expected in early January 2004.
The T&D sale will bring total proceeds from disposals since
this time last year to 2.5 billion euro. Other assets sales are
currently underway and due to uncertainties linked to timing,
total proceeds secured by 31 March 2004 are expected to be
around 2.7 billion euro.

ALSTOM s results for the first half of fiscal year 2004 will
be published on 13 November 2003.


* * *


ALSTOM has requested the Paris, London and New York stock
exchanges to resume trading in its shares from 9.00 am CET
tomorrow, Tuesday, 23 September 2003.

 ANNEX: DETAILS OF REVISED REFINANCING
PACKAGE

Capital Increase

A 300 million euro capital increase will be carried out
either with preferential subscription rights for existing
shareholders or through the issuance of warrants to existing
shareholders giving them equivalent rights. The operation is
fully guaranteed by a syndicate of banks.


The subscription price will be 1.25 euro per share.

20-year bond reserved for the French State, reimbursable
with shares subject to European Commission approval

The French State will fully subscribe to a 300 million euro
subordinated note with a maturity of 20 years, which will be
reimbursable with shares upon approval from the European
Commission. Principal characteristics:


 ð Strike: 1.25 euro per share.


 ð Coupon: Euribor + 500 bps, of which 150 bps
capitalised and paid on reimbursement of the loan s
principal.

15-year bond reserved for the French State

The French State will fully subscribe to a 200 million euro
subordinated note, with a maturity of 15 years. Principal
characteristic:


 ð Coupon: Euribor + 500 bps, of which 150 bps
capitalised and paid on reimbursement of the loan s
principal.

Bonds mandatorily reimbursable with shares

In parallel with the capital increase, ALSTOM will issue 900
million euro in bonds mandatorily reimbursable with shares (ORA)
fully guaranteed by a syndicate of banks. This amount may be
increased up to ¬ 1,000 million. Existing shareholders will
have preferential rights to subscribe to such bonds. The
principal terms of the bonds are:


 ð Coupon: 2%, capitalised for the first year.


 ð 1 bond will be mandatorily reimbursed with 1 share.


 ð Issuance price: 1.40 euro per bond.


 ð Maturity: 31 December 2008.

Subordinated loans

ALSTOM will be provided with a total of 1,500 million
euro in subordinated loans. The French State has agreed to
participate in 300 million euro of the total amount, with the
remainder provided by the banks. The amount of the banks
subordinated loans may be decreased to 1,100 million euro if the
ORA offering is increased to 1,000 million euro. The principal
terms of the loans are:


 ð Interest rate per annum: Euribor + 450 bps, of which
150 bps capitalised and paid on reimbursement of the loan's
principal.


 ð Maturity: 5 years.


 ð Early repayment allowed at ALSTOM's option.

Short-term facilities

Short-term liquidity needs will be covered by the banks for 300
million euro and the French State for 1,200 million euro.

Contract Bonds and Guarantees

A 3,500 million euro contract bonds and guarantees facility has
been fully underwritten by a syndicate of banks, with 65% of each
bond  counter-guaranteed by the French State.

Advisors

Lehman Brothers is acting as ALSTOM s sole advisor.

* * *

 

Press Relations:   S. Gagneraud / G. Tourvieille


Tel. +33 1 47 55 25 87

internet.press@chq.alstom.com

Investor Relations:  E. Chatelain


Tel. +33 1 47 55 25 33

investor.relations@chq.alstom.com

M Communications: L. Tingström


Tel. + 44 789 906 6995

This press release does not constitute anoffer to sell, or a
solicitation of offers to purchase or subscribe for, securities
in the United States. The securities referred to herein have not
been and will not be, registered under the Securities Act of
1933, as amended, and may not be offered or sold in the United
States abasent registration or an applicable exemption from
registration requirements.

Forward-Looking Statements:


This press release contains, and other written or oral reports
and communications of ALSTOM may from time to time contain,
forward-looking statements, within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934.  Examples of such forward-looking
statements include, but are not limited to (i) projections or
expectations of sales, orders received, income, operating
margins, dividends, provisions, cash flow, debt or other
financial items or ratios, (ii) statements of plans, objectives
or goals of ALSTOM or its management, (iii) statements of future
product or economic performance, and (iv) statements of
assumptions underlying such statements.  Words such as
believes , anticipates , expects , intends , aims , plans and
will and similar expressions are intended to identify forward
looking statements but are not exclusive means of identifying
such statements.  By their very nature, forward-looking
statements involve risks and uncertainties that the forecasts,
projections and other forward-looking statements will not be
achieved.  Such statements are based on management s current
plans and expectations and are subject to a number of important
factors that could cause actual results to differ materially from
the plans, objectives and expectations expressed in such
forward-looking statements.  These factors include: (i) the
inherent difficulty of forecasting future market conditions,
level of infrastructure spending, GDP growth generally, interest
rates and exchange rates; (ii) the effects of, and changes in,
laws, regulations, governmental policy, taxation or accounting
standards or practices; (iii) the effects of currency exchange
rate movements; (iv) the effects of competition in the product
markets and geographic areas in which ALSTOM operates; (v) the
ability to increase market share, control costs and enhance cash
generation while maintaining high quality products and services;
(vi) the timely development of new products and services; (vii)
the impact of our high levels of indebtedness; (viii) the ability
to renegotiate or renew our existing credit lines and to meet the
financial and other covenants contained in our financing
agreements; (ix) difficulties in obtaining bid, performance and
other bonds with customary amounts or terms; (x) the timing of
and ability to meet the cash generation and other initiatives of
the new action plan, particularly, the ability to finalise the
disposal of the Transmission and Distribution business or to
dispose of certain real estate assets on favourable terms or in a
timely fashion; (xi) the results of the United States Securities
and Exchange Commission s ( SEC ) investigation and our own
internal investigation into matters relating to ALSTOM
Transportation Inc., and the impact of those investigations on
ALSTOM Transportation Inc. s ability to conduct its business;
(xii) the outcome of the putative class action lawsuits recently
filed against us and certain of our current and former officers;
(xiii) the results of the European Commission s review of the
French State s involvement in our recently renegotiated financing
package; (xiv) receipt of shareholder approval of our recently
renegotiated financing package, (xv) the availability of external
sources of financing on commercially reasonable terms; (xvi) the
inherent technical complexity of many of ALSTOM s products
and  technologies and the ability to resolve effectively, on
time and at reasonable cost technical problems that inevitably
arise, including in particular the problems encountered with the
GT24/GT26 gas turbines and the UK trains; (xvii) risks inherent
in large contracts and/or significant fixed price contracts that
comprise a substantial portion of ALSTOM s business; (xviii) the
inherent difficulty in estimating future charter or sale prices
of any relevant cruise ship in any appraisal of the exposure in
respect of the Renaissance Cruises matter; (xix) the inherent
difficulty in estimating ALSTOM s exposure to vendor financing
and other credit risks which may notably be affected by customers
payment defaults; (xx) the ability to invest in successfully, and
compete at the leading edge of, technology developments across
all of ALSTOM s Sectors; (xxi) the availability of adequate cash
flow from operations or other sources to achieve management s
objectives or goals; (xxii) whether certain of our markets,
particularly the Power Sectors, recover from their currently
depressed state; (xxiv) the impact on customer confidence of our
ongoing liquidity and other difficulties, and our ability to
re-establish this confidence; (xxv) the effects of disposals and
acquisitions generally; (xxvi) the unusual level of uncertainty
at this time regarding the world economy in general; and (xxvii)
ALSTOM s success at adjusting to and managing the risks of the
foregoing. 


The foregoing list is not exhaustive; when relying on
forward-looking statements to make decisions with respect to
ALSTOM, you should carefully consider the foregoing factors and
other uncertainties and events, as well as other factors
described in other documents ALSTOM files or submits from time to
time with the SEC, including reports submitted on Form 6-K. 
In particular, we expect our Annual Report on Form 20-F for the
fiscal year ended 31 March 2003 (including our audited financial
statements for fiscal years ended 31 March 2003, 2002 and 2001)
to be filed with the SEC in September 2003. Forward-looking
statements speak only as of the date on which they are made, and
ALSTOM undertakes no obligation to update or revise any of them,
whether as a result of new information, future events or
otherwise.

FSA/Stabilisation.

Revised Financing Package Presentation

Conference de Presse Presentation