By Allison Lampert and Ankit Ajmera
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "(Reuters) – Bombardier exited commercial aviation on Thursday, selling a loss-making plane programs that ended its high-stakes gamble on a new jet that once drove it to the brink of bankruptcy. “data-reactid =” 23 “> (Reuters) – Bombardier On Thursday, he left commercial aviation and sold a loss-making aircraft program that ended his high-stakes gambling with a new jet that once brought it to the brink of bankruptcy.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The Canadian plane and train maker sold its minority stake in the A220 jet, formerly known as the CSeries, to Airbus SE for $ 600 million, and said it would take a $ 1.6 billion charge on the program. “data-reactid =” 24 “> The Canadian aircraft and train manufacturer sold its minority stake in the A220 jet, formerly known as the CSeries, to Airbus SE for $ 600 million and said it would require a $ 1.6 billion fee for the program.
Bombardier once threatened to reshape global aviation with the first brand new narrow body jet in 30 years, triggering a race of major rivals to develop their own new jets.
However, the C $ 6 billion program was subject to delays and cost overruns. Bombardier, which has required government bailouts to fund the program in recent years, finally sold a Canadian dollar majority stake to Airbus in 2017.
With the latest deal, Airbus has a 75% stake in the A220 program and the Canadian province of Quebec will own 25%. This will allow Bombardier to avoid future capital investments of around $ 700 million.
Quebec, which acquired half of the $ 1 billion program in 2015, said it would stop investing in the joint venture.
“Yes, the aerospace sector has seen some turmoil in recent years, but I think it will be over soon,” Quebec Economy Minister Pierre Fitzgibbon told reporters in Quebec City.
“I think this step was essential for the company to continue its operations.”
Bombardier has dropped companies to turn around. CEO Alain Bellemare told analysts Thursday that the “cleanup in the past five years” would continue.
“We have options and will continue to review our options to see if there are any ways to speed up the deleveraging phase of the turnaround plan,” he said in a conference call.
The company is considering a possible sale of its remaining Jet or Rail businesses.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Bombardier's shares were flat at midday after earlier dropping 9 % on disappointment the company did not announce a deal to sell its rail unit to France's Alstom . “data-reactid =” 34 “> Bombardier’s shares remained unchanged at noon after falling 9% earlier due to disappointments. The company did not announce a deal to sell its rail unit to French company Alstom ,
Bombardier struggled with higher rail costs due to some challenging contracts and, according to refinitive data, has $ 9.7 billion in outstanding bonds.
The company forecast an almost positive cash flow for 2020. Cash flow was minus $ 1.20 billion in 2019.
Refinitiv’s IBES data predicts sales of around $ 15 billion in 2020, compared to $ 13.7 billion in 2019 and below analysts’ forecasts for $ 18.18 billion in 2020 ,
In 2020, the company sees 35 to 40 deliveries of its flagship Global 7500 business jet, each costing $ 73 million.
(Additional reporting by Ankit Ajmera and Rachit Vats in Bengaluru and David Ljunggren in Ottawa; editing by Bernadette Baum)