Bombardier, the Canadian plane and train maker, has secured a US$1 billion secured loan, indicating that the company will now have sufficient liquidity to see it through the worst of the COVID-19 pandemic.
Having severely revised its 2020 forecast, Bombardier has now begun to announce job cuts as the market for high-profit-margin jets falls, with estimates indicating a thirty-three percent drop in demand. According to the company, the loan will provide sufficient liquidity for working capital during a period when it will have to readjust its production rates downward.
With second-quarter results due to be announced in the first week of August, pro-forma liquidity of about US$3.4 billion, and about US$1 billion of free cash flow usage is anticipated. Bombardier announced that at the end of June it had approximately US$1.7 billion cash in hand and US$2.4 billion in liquidity.
