Bombardier has confirmed the closing of the previously announced sale of its transportation business to Alstom.
Total proceeds to the vendors after the deduction of debt-like items and transferred liabilities are US$6.0 billion. After deducting la Caisse de dépôt et placement du Québec equity position of US$2.5 billion, transaction costs, and including the impact from closing adjustments and obligations related to achieving a minimum cash balance at Bombardier Transportation at the end of 2020, Bombardier expects net proceeds of approximately US$3.6 billion. This amount includes US$488 million of cash from the redemption of equity and a US$125 million loan reimbursement by transportation business, settled in conjunction with the transaction closing. Net proceeds also include approximately US$600 million of Alstom shares (€500 million representing 11.5 million shares for a fixed subscription price of €43.46 per share), monetizable starting in late April 2021.
“With this transaction now complete, Bombardier begins an exciting new chapter focused exclusively on designing, building and servicing the world’s best business jets,” said Éric Martel, President and Chief Executive Officer, Bombardier. “With an unmatched product portfolio, a world class customer services network and incredibly talented employees, we have a strong foundation to build upon as we use the proceeds from the transaction to begin addressing our balance sheet challenges through debt paydown.”
Pro-forma net debt is approximately US$4.7 billion, which includes long-term debt of US$10.1 billion, net of US$1.8 billion cash on hand at Bombardier (excluding Transportation) as of December 31, 2020, and the approximately US$3.6 billion proceeds from the transportation sale. The company intends to deploy available proceeds from the sale of transportation towards debt paydown and continues to evaluate the most efficient debt reduction strategies. (€1.00 = US$1.21 at time of publication.)
