Bombardier bailout: Quebec invests $1 billion in C Series aircraft program

MONTREAL, P.Q., 3 Nov. 2015. Bombardier has entered into a memorandum of understanding (M.O.U.) with the Government of Quebec – specifically the Ministère de l’Économie, de l’Innovation et des Exportations du Québec (through Investissement Québec) – whereby the airframe manufacturer will receive $1 billion in exchange for a 49.5 percent equity stake in the C Series aircraft program.

Nov 3rd, 2015
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MONTREAL, P.Q., 3 Nov. 2015. Bombardier has entered into a memorandum of understanding (M.O.U.) with the Government of Quebec – specifically the Ministère de l’Économie, de l’Innovation et des Exportations du Québec (through Investissement Québec) – whereby the airframe manufacturer will receive $1 billion in exchange for a 49.5 percent equity stake in the C Series aircraft program.

Quebec is investing in a newly-created limited partnership (the Investment) to which the assets, liabilities, and obligations of the C Series aircraft program would be transferred. This newly created limited partnership will be owned 50.5 percent by Bombardier and, as a subsidiary of Bombardier, will carry on the operations related to Bombardier’s C Series aircraft program. The newly created limited partnership will continue to be consolidated in Bombardier's financial results.

During Paris Air Show, Bombardier executives revealed the first C Series aircraft customer: Swiss International Airline.

The Investment has been approved by the Board of Directors of Bombardier and the Cabinet of the Government of Québec, and remains conditional upon the completion of definitive agreements, the receipt of consents from third parties, the completion of an internal pre-closing reorganization, the receipt of required regulatory approvals, and other customary conditions precedent. The proceeds of the Investment will be used entirely for cash flow purposes of the C Series program.

The Investment was negotiated between Bombardier and the Government at arm’s length and will not materially affect control of Bombardier.

The definitive agreements are expected to be entered into on or before January 1, 2016, or such other date as the Corporation and the Government shall agree, and disbursement of the Investment and issuance of the warrants will occur over two equal installments, expected to take place on April 1, 2016 and June 30, 2016, respectively, subject to the conditions to closing.

The Investment contemplates a continuity undertaking providing that Bombardier shall maintain in the Province of Québec, for a period of 20 years, the newly-created limited partnership’s operational, financial and strategic headquarters, manufacturing and engineering activities, shared services, policies, practices, and investment plans for research and development, in each case in respect of the design, manufacture, and marketing of CS100 and CS300 aircraft and after-sales services for these aircraft and that Bombardier will operate the facilities located in Mirabel for these purposes.

The Government’s interest in the partnership will be redeemable in certain circumstances.

Bombardier is a manufacturer of planes and trains headquartered in Montréal, Canada.


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