It has been confirmed that the deal first disclosed on October 25, 2015 whereby the Quebec government was to invest US$1 billion in cash-strapped Bombardier, has been concluded. The payment will come in two tranches, with US$500 million due on June 30, and a further US$500 million on September 1.
According to Bombardier, “The investment has been approved by Bombardier’s board of directors and the cabinet of the government of Québec, and remains conditional upon the satisfaction of other customary conditions. The $1 billion US investment will be used entirely for cash flow purposes of the CSALP.”
The construction of the investment has involved the creation of a new company CSeries Aircraft Limited Partnership (CSALP). In essence, the Quebecois government will take a 49.5% stake in the CSeries as opposed to the company as a whole. The board of the new company will comprise three Bombardier representatives and two from the Quebecois government.
Bombardier added, “Bombardier will maintain operational control of the CSeries program and consolidate its financial results. Fred Cromer will serve as president of the CSALP, and continue in his current role.”
It was also announced back on April 25 that both the Quebecois government and Bombardier have approached the Ottawa government to pitch in with a further US$1 billion to increase the likelihood of overall success for the project. However, the order books for the CSeries are looking healthier since the signing of a deal to supply 75 CS100s to US-based Delta Airlines and the signing of a letter of intent to supply 45 CS300 jets to Air Canada.
However, this is not the only additional investment in a sector of Bombardier, with the company receiving US$1,5 billion from the Quebec pension fund in exchange for a 30% stake in the train-making arm.
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