- Bombardier (TSX:BBD.A) has settled a 2022 lawsuit with bondholders that alleged the company defaulted on its 7.45 per cent bonds due in 2034
- The company stated it believes the confidential settlement will have no material effect on its operations, despite the plaintiffs being collectively invested for almost US$130 million
- Bombardier designs, builds, modifies and maintains a leading portfolio of aircraft for business and defence
- Bombardier stock has added 38.14 per cent year-over-year, but only 54.23 per cent since 2019
Bombardier (TSX:BBD.A) has settled a 2022 lawsuit with bondholders that alleged the company defaulted on its 7.45 per cent bonds due in 2034.
The plaintiffs, made up of three hedge funds – Antara Capital Master Fund, Corbin Erisa Opportunity Fund and Corbin Opportunity Fund – argue that Bombardier violated the terms of the debt by selling off its rail business, regional jet program and aerostructures division in 2020 and 2021.
To sweep its accusers and their collective just under US$130 million investment under the rug, Bombardier proceeded to sell US$260 million more of the same notes to the Ontario-based Canso Investment Council, granting it a majority holding and the ability to waive the default, which it did not delay in exercising. In March 2023, New York Supreme Court Justice Andre Borrok opined that handing Canso control, as an investor after the alleged default, would invalidate the rights of previous bondholders. Canso was excused from the lawsuit in December 2023.
In Monday’s news release, Bombardier refers to the allegations as “without merit” and claims that “the settlement is not material to the company’s financial results or consolidated cash position,” even though its accusers’ total investment surpasses the US$110 million in net income the company generated in Q1 2024. The terms of the settlement were not made public.
About Bombardier
Bombardier designs, builds, modifies and maintains a leading portfolio of aircraft for business and defence. The company’s customers operate a fleet of about 5,000 aircraft across the world supported by 10 service facilities across six countries.
Bombardier stock (TSX:BBD.A) last traded at C$87.91 per share. The stock has added 38.14 per cent year-over-year, but only 54.23 per cent since 2019.
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(Top photo of Bombardier’s Global 5500 aircraft: Bombardier)
