Quebec to Invest $1b in Bombardier’s CSeries Jet



Bombardier CSeries Jet

Bombardier Inc., the Canadian multinational transportation and aerospace company, has agreed to trade off nearly half of their stake in the CSeries jet program to the government of Quebec. In exchange for this large stake, the Quebec government will provide a $1 billion lifeline to Bombardier Inc. This deal confirms that Bombardier is too important and vital to the economy of Quebec, to the extent that the government would not allow it to fail. The company employs more than 35,000 people, playing a crucial role in the Canadian aerospace sector.

The long-delayed CSeries, paired with increasing development costs, has put severe pressure on Bombardier’s cash position. The company anticipates that it will have to spend around $2 billion over the span of the next two years in order to accumulate enough sales and sufficiently reduce costs to balance out the cash-flow basis.

Once this deal is finalized, Bombardier should have cash reserves close to $5 billion after Quebec’s investment. Bombardier also intends to generate additional money by selling a minority stake in its train business, either to an individual buyer or through an initial public offering.

Ottawa has to do its fair share", said economy minister of Quebec, Jacques Daoust. They supported the auto industry in Ontario. We expect them to support the aerospace sector in Quebec.

The Wall Street Journal reported on Wednesday that Bombardier had recently requested 350 million Canadian dollars (or $265.3 million USD) in financial assistance from the federal government. Bombardier has resorted to government funding, as its dual-class share structure has made it more difficult to attract funding from investors who are concerned that the founding family maintains too much control. The dual-share structure that Bombardier adheres to offers the family, as well as descendant of the company founder, the ability to control 54.4% of the total voting rights.  In addition to this, the relatives own roughly 8.8% of Bombardier’s outstanding voting and super voting shares.

Here at ASAP Purchasing, we have the resources to distribute a vast array of Bombardier products. We provide our customers with a simplified and speedy procurement process. We ensure that our customers’ production lines and aircraft are always up and running effectively. We offer cost-effective component solutions by improving our customers’ negotiation power. If you are interested in a quote, please contact our friendly sales staff at sales@asapsemi.com or call us at 1-714-705-4780.



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