Au revoir, A220. Bye bye, commercial aviation.
Bombardier Inc. is transferring its 33.6 per cent stake in the partnership that builds the plane formerly known as the C Series to Airbus SE and the government of Quebec, the companies said in a statement issued early Thursday. Airbus paid Bombardier $591 million to boost its stake to 75 per cent, while Quebec now holds the remaining 25 per cent.
The deal, which is effective immediately, cements Bombardier’s exit from commercial aerospace. It also frees the Montreal-based manufacturer of future capital requirements to Airbus Canada LP, as the venture is called, just as production is ramping up. Bombardier put the future contributions at US$700 million.
The transaction boosts Bombardier’s pro-forma cash-on-hand to more than $4 billion and liquidity to $5.5 billion, Bombardier said Thursday in a separate statement.
Bombardier is “actively pursuing options that would allow it to accelerate deleveraging” and pay down debt, the company added. It didn’t address recent media reports that said Bombardier was holding talks with France’s Alstom SA to sell its rail unit.
Of the $591 million, Bombardier received $531 million at closing while $60 million will be paid over the 2020-21 period.
Airbus can buy out Quebec in 2026, three years later than before. The provincial government invested US$1 billion in the former C Series program four years ago, giving Bombardier a much-needed cash injection.