23:11:31 EDT Thu 09 Apr 2020
Enter Symbol
or Name
USA
CA



Login ID:
Password:
Save
Bombardier Inc
Symbol BBD
Shares Issued 2,128,017,205
Close 2020-02-12 C$ 1.57
Recent Sedar Documents

Bombardier to receive $591M for Airbus Canada sale

2020-02-13 02:54 ET - News Release

Mr. Alain Bellemare reports

AIRBUS AND THE GOVERNMENT OF QUEBEC BECOME SOLE OWNERS OF THE A220 PROGRAMME AS BOMBARDIER COMPLETES ITS STRATEGIC EXIT FROM COMMERCIAL AVIATION

Airbus SE, the government of Quebec and Bombardier Inc. have agreed upon a new ownership structure for the A220 program, whereby Bombardier transferred its remaining shares in Airbus Canada Limited Partnership to Airbus and the government of Quebec. The transaction is effective immediately.

This agreement brings the shareholdings in Airbus Canada, responsible for the A220, to 75 per cent for Airbus and 25 per cent for the government of Quebec, respectively. The government's stake is redeemable by Airbus in 2026 -- three years later than before. As part of this transaction, Airbus, through its wholly owned subsidiary Stelia Aerospace, has also acquired the A220 and A330 work package production capabilities from Bombardier in Saint-Laurent, Que.

This new agreement underlines the commitment of Airbus and the government of Quebec to the A220 program during this phase of continuous ramp-up and increasing customer demand. Since Airbus took majority ownership of the A220 program on July 1, 2018, total cumulative net orders for the aircraft have increased by 64 per cent to 658 units at the end of January, 2020.

"This agreement with Bombardier and the government of Quebec demonstrates our support and commitment to the A220 and Airbus in Canada. Furthermore, it extends our trustful partnership with the government of Quebec. This is good news for our customers and employees, as well as for the Quebec and Canadian aerospace industry," said Airbus chief executive officer Guillaume Faury. "I would like to sincerely thank Bombardier for the strong collaboration during our partnership. We are committed to this fantastic aircraft program, and we are aligned with the government of Quebec in our ambition to bring long-term visibility to the Quebec and Canadian aerospace industry."

"I am proud that our government was able to reach this agreement. We have succeeded in protecting paying jobs and the exceptional expertise developed in Quebec, despite the major challenges we faced in this regard when we took office. We have consolidated the government's position in the partnership, while respecting our commitment not to reinvest in the program. By opting to strengthen its presence here, Airbus has chosen to focus on our talents and our creativity. The decision of an industrial giant like Airbus to invest more in Quebec will help attract other world-class prime contractors," the Premier of Quebec, Francois Legault, stated.

"This agreement is excellent news for Quebec and its aerospace industry. The A220 partnership is now well established and will continue to grow in Quebec. The agreement will allow Bombardier to improve its financial situation and Airbus to increase its presence and footprint in Quebec. It's a win-win situation for both the private partners and the industry," pointed out Pierre Fitzgibbon, Minister of the Economy and Innovation.

With this transaction, Bombardier will receive a consideration of $591-million from Airbus, net of adjustments, of which $531-million was received at closing and $60-million will be paid over the 2020-2021 period. The agreement also provides for the cancellation of Bombardier warrants owned by Airbus, as well as releasing Bombardier of its future financing capital requirement to Airbus Canada.

"This transaction supports our efforts to address our capital structure and completes our strategic exit from commercial aerospace," said Alain Bellemare, president and chief executive officer, Bombardier. "We are incredibly proud of the many achievements and tremendous impact Bombardier had on the commercial aviation industry. We are equally proud of the responsible way in which we have exited commercial aerospace, preserving jobs and reinforcing the aerospace cluster in Quebec and Canada. We are confident that the A220 program will enjoy a long and successful run under Airbus's and the government of Quebec's stewardship."

The single-aisle market is a key growth driver, representing 70 per cent of the expected global future demand for aircraft. Ranging from 100 to 150 seats, the A220 is highly complementary to Airbus's existing single-aisle aircraft portfolio, which focuses on the higher end of the single-aisle business (150 to 240 seats).

As part of the agreement, Airbus has acquired the Airbus A220 and A330 work package production capability from Bombardier in Saint-Laurent, Que. These production activities will be operated in the Saint Laurent site by Stelia Aeronautique Saint Laurent Inc., a newly created subsidiary of Stelia Aerospace, which is a 100-per-cent Airbus subsidiary.

Stelia Aeronautique Saint-Laurent will continue the production of the A220 cockpit and aft fuselage production, as well as A330 work packages, for a transition period of approximately three years at the Saint-Laurent facility. A220 work packages will then be transferred to the Stelia Aerospace site in Mirabel to optimize the logistical flow to the A220 final assembly line, also located in Mirabel. Airbus plans to offer all current Bombardier employees, working on the A220 and A330 work packages at Saint-Laurent, opportunities around the A220 program's ramp-up, ensuring know-how retention, as well as business continuity and growth in Quebec.

At the end of January, 2020, 107 A220 aircraft were flying with seven customers on four continents. In 2019 alone, Airbus delivered 48 A220s, with the further ramp-up to be continued.

About Bombardier Inc.

With over 68,000 employees, Bombardier is a global leader in the transportation industry, creating innovative and game-changing planes and trains. Its products and services provide world-class transportation experiences that set new standards in passenger comfort, energy efficiency, reliability and safety.

Headquartered in Montreal, Canada, Bombardier has production and engineering sites in 28 countries, as well as a broad portfolio of products and services for the business aviation, commercial aviation and rail transportation markets. In the fiscal year ended Dec. 31, 2018, Bombardier posted revenues of $16.2-billion (U.S.).

© 2020 Canjex Publishing Ltd. All rights reserved.