(Bloomberg) -- Alstom SA slumped after the train maker flagged a possible equity raise alongside job cuts and asset sales to help shore up its balance sheet.

The shares dropped as much as 22% Wednesday, wiping €1.1 billion ($1.2 billion) off the company’s market value. The decline accelerated following Chief Executive Officer Henri Poupart-Lafarge telling Bloomberg Television an equity raising was an option, though not the company’s preferred one.

The stock lost more than half its value this year after Alstom slashed its full-year forecast for free cash flow last month in response to a jump in inventories and delays to a major UK project. The outlook cut adds to woes from Alstom’s troubled $5.5 billion acquisition of Canadian manufacturer Bombardier Inc.

To stem cash burn, the French manufacturer has started a divestment program to raise as much as €1 billion, it said Wednesday. Alstom also plans to cut around 1,500 positions.

“Until the ‘will they/won’t they’ question is resolved on an equity raise, share can remain volatile,” Citi analysts led by Martin Wilkie said in a note. Last month, the company had ruled out selling shares to raise capital.

With the measures, Alstom aims to maintain its investment grade rating and reduce net debt by €2 billion by March 2025. The job cuts represent close to 10% of total sales and administrative positions and won’t affect engineering or factory workers. 

“We’ll do whatever is needed to keep this strong balance sheet,” Poupart-Lafarge, who also holds the board chairman position, said in the interview, adding it’s too early to say which assets will be sold.

Nearly three years after the purchase of Bombardier’s rail business, Alstom continues to wade through costly legacy contracts from its former competitor. It has blamed mismanagement by Bombardier for delivery delays and the heavy spending needed to complete them.

On Oct. 31, the manufacturer signed a new €2.25 billion liquidity line with an international bank and in July will propose former Safran SA CEO Philippe Petitcolin as board chairman, splitting the two top roles.

Equity and equity-like issuances, including the refinancing of certain assets, also are part of the performance program. Alstom said it remains “flexible” on the sequencing and rightsizing of such instruments. 

The company said last month it was expecting a delay to the UK Aventra project it inherited from Bombardier, which includes 443 trains that serve lines such as the London Overground and Elizabeth Line. Alstom said the work should be completed during fiscal 2024-25 instead of in the first half of this year.

Alstom recorded negative free cash flow of €1.12 billion in the six months through September. The company sees negative free cash flow of as much as €750 million for the full fiscal year, compared with a previous forecast of “significantly positive” results.

--With assistance from Caroline Connan and Kriti Gupta.

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