French engineering giant Alstom SA
Alstom's troubles began in earnest in 2000, when the company purchased a gas turbine division from Swiss/Swedish conglomerate ABB
That's a brutal mistake, but you know what? That's capitalism. Equity shareholders who bet on the wrong horse can lose everything -- it happens in almost every case where a company files for bankruptcy. Ah, but not in La Belle France. Not with a company that is considered to be a national force that can compete with American and other competitors on the world market. Not when there are thousands of French jobs at stake. Sort of.
France has a long history of supporting money-losing companies that happen to be French: France Telecom
It's frankly surprising that existing shareholders will be allowed to keep anything. The company is drowning in debt and, without any bailout, would most likely fail without restructuring. So while Alstom shareholders may fret about the terms of the bailout, they should also thank their lucky stars -- even today the company's equity is valued on the open market at US$370 million. Without a bailout, it would be worth exactly nothing. Whatever the equity is worth at the day of the restructure should be considered a direct transfer of wealth from French taxpayers to Alstom shareholders.