In a press release issued on May 3, by Bombardier, aside from highlighting a 12% increase in year-over-year revenue to US$4bn, the plane and train maker has also announced that it has entered into a definitive agreement to sell its Downsview, Toronto property to the Public Sector Pension Investment Board for approximately US$635 million, giving the company a positive cash impact of more than US$550 million.
Under a lease agreement, the company will continue to operate from Downsview for up to three years following the closing of the deal, with two optional one-year extension periods. Bombardier has operated from the site since purchasing Boeing Co.’s de Havilland unit in 1992.
The facility, which is about 13 kilometers (8 miles) northwest of downtown Toronto, is where Bombardier assembles turboprop planes such as the Q400, and business jets. Company president and CEO Bellemare confirmed that the company uses only about 10 per cent of the property and bears the cost of operating a 2,100-metre (7,000-foot) runway, including ancillary support such as a fire department and control tower.
Simultaneously, Bombardier has also entered into a letter of agreement with the Greater Toronto Airports Authority (GTAA) for a long-term lease of approximately 38 acres of property at Toronto Pearson International Airport. Within the next five years Bombardier intends to create a new centre of excellence and final assembly plant for its Global business jets, though where the Q400 turboprop will be manufactured is yet to be decided.
Bellemare confirmed that Bombardier is committed to the turboprop, saying there are good sales opportunities in emerging markets such as China and Africa.
