Alstom wins Contract for Cruise Ships

Alstom signed a contract worth $1.17B to build two cruise ships for Italian line MSC in a deal which might avert restructuring of its shipbuilding business following the near bankruptcy of the group last year. The order for the ships, which will each measure 1,106 ft. in length and offer 1,650 cabins, was signed by the chief executive of MSC, Pierre Francesco Vago and his counterpart from Alstom Marine, Patrick Boissier, during a press conference on Monday. The giant liners will be slightly smaller than the 345-metre Queen Mary 2, the biggest cruise ship in the world. They will be built in the shipyard in the French port of Saint Nazaire where the Queen Mary 2 was launched last year. The yard, known as Les Chantiers de l'Atlantique, needed new contracts to keep the full facilities working after the Queen Mary 2 contract, and had begun to lay some workers temporarily off work before the summer. Following the order from MSC, chief executive of Alstom Marine, Patrick Boissier, said that the shipbuilding unit would be profitable in 2007-2008. Some analysts said that the new contract with MSC might enable the company to avert restructuring. French brokerage Aurel Leven said in a note referring to the implications for job cuts: "Undoubtedly, this order will allow Alstom to avoid a new social plan". The price of shares in Alstom rose by 2.28 percent to 42.10 euros in mid-day trading. Paris's CAC 40 index of leading shares was showing a gain of 0.40 percent. Also on Monday, Alstom said it had completed the sale of its Power Conversion division to a British investment fund, Barclays Private Equity, for an unspecified amount. Alstom Power Conversion makes generators and control equipment for industry and for the shipbuilding sector. Most of its production sites are in Germany, Britain, the United States and Brazil. The group, which also builds the French TGV high-speed train, had got into difficulties notably over sudden weakness in the cruise ship market following the September 11, 2001 attacks in the United States, which depressed the travel and tourism sectors, and because of problems with its power turbines. Under the accord with the EU, Alstom agreed to sell 30 percent of its activities, and to divest an addition 800 million euros' worth of activities. Under the terms of the order from MSC, the first of the two ships would be delivered in June 2008 and the second in March 2009.