Bombardier awaits decision after Canada completes aid due diligence

Bombardiers request for further aid of US$1bn has undergone due diligence from the Canadian government, with an unnamed source confirming that “The due diligence is done. The government is preparing to make an announcement in a matter of weeks, not months.” The additional funds are required for Bombardier’s C-Series development which aims to challenge the duopoly of Airbus with the A320 Family, and Boeing with the 737 Family in the 120-150 seat single-aisle passenger jet sector.
Last year Quebec invested US$1bn in the company’s C-Series passenger jet and the province is urging Ottawa to do the same to protect the 34,900-strong company workforce. However, the likelihood of an answer being given prior to the impending federal budget on March 22nd, as indicated by Justin Trudeau, Canada’s prime minister, is slim, with Innovation Minister Navdeep Baines, who is directly connected with the matter, stating this would not be the case.
“We want to make sure we’re very thoughtful and doing our homework. Of course, any decision we make is not attached to the budget cycle,” Baines confirmed, adding “We’ve been very engaged with the company, we’ve been making sure we’re doing our due diligence … it is a very complex issue.”
It has been indicated that Ottawa was likely to offer some degree of aid, but they were uncomfortable with the way the initial US$1bn aid deal was structured. However, Quebec is keen to see the federal government agree to a separate board for the C-Series as this would dilute the influence of the founding family, who own a 50.5% stake in the C-Series. With their US$1bn investment Ottawa would take a one-third stake in the hived-off venture which would allow Bombardier to boost short-term financial results.