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18-Feb-2020 8:28 AM

Bombardier to sell rail division and focus on business aviation

Bombardier announced (17-Feb-2020) a formal strategic decision to focus exclusively on business aviation and plans to accelerate its deleveraging through the sale of its rail business. Towards this, Bombardier signed a MoU with Alstom and the Caisse de dépôt et placement du Québec for the sale of Bombardier Transportation (BT). Key details include:

  • Bombardier and la Caisse will sell their interests in BT to Alstom at an enterprise value of USD8.2 billion;
  • Total proceeds, after deduction of debt-like items and transferred liabilities, including pension obligations, and net of BT cash, are expected to be approximately USD6.4 billion, subject to upward adjustments of up to USD440 million. After deducting la Caisse's equity position between USD2.1 billion and USD2.3 billion, Bombardier would receive net proceeds of between USD4.2 billion to USD4.5 billion, including USD550 million of Alstom shares for a fixed subscription price of EUR 47.50, monetisable after a three month lock-up post-closing, subject to closing adjustments, indemnities and the EUR to USD exchange rate;
  • Proceeds will be directed towards debt paydown, with Bombardier to evaluate the most efficient debt reduction strategies;
  • Closing is expected in 1H2021, subject to customary regulatory approvals. [more - original PR]

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