- Bombardier (BBD) has heavily discounted its planned deal with US aircraft parts manufacturer Spirit Aerospace
- Through a newly finalised deal, Bombardier will sell its aerospace businesses to Spirit for around C$245 million, a 45 per cent discount on the previous estimated price
- Spirit will also also assume $824 million in liabilities, which include government refundable advances and pension obligations
- The deal is part of Bombardier’s overall plan to become solely a business aircraft company, divesting from aviation’s broader industries in the process
- Bombardier (BBD) is up 1.56 per cent and is trading at 32 cents per share
Bombardier (BBD) has revealed a heavily discounted final price for its planned deal with US aircraft parts manufacturer Spirit Aerospace.
Having previously expected to sell its aerospace businesses for around C$500 million, Bombardier has unveiled a finalised deal with a 45 per cent discount in tow.
The deal is part of Bombardier’s overall plan to refocus solely as a business aircraft company, divesting from aviation’s broader industries in the process.
Through the newly amended agreement, Spirit will gain control of Bombardier’s aerostructures activities and aftermarket service operations, which are based in both Northern Ireland and Morocco, as well as the company’s US-based aerostructures maintenance, repair and overhaul business.
In exchange, Spirit will now pay just $245 million in cash, while also assuming $824 million in liabilities, which include government refundable advances and pension obligations.
President and CEO Éric Martel said Bombardier was very excited about the company’s future as a more focused company.
“Today’s announcement marks another milestone towards achieving our strategic goal of repositioning Bombardier as a pure-play business jet company,
“The proceeds from this transaction and from the pending sale of Bombardier Transportation strengthen our liquidity and position us to begin reshaping our capital structure and address our balance sheet challenges so that we can achieve the full potential of our incredibly talented employees and our industry leading business jet portfolio,” he said.
Bombardier announced a similarly discounted deal to sell its transport business to French multinational Alstom in mid-September. The deal with Alstom was finalised at $11.07 billion, a $461 million drop compared to the previous memorandum of understanding.
The reduced sale prices follow a unparalleled year-to-date for the aviation industry, which is facing tough times amid ongoing pandemic-related travel bans globally.
The deal with Spirit is expected to finalised on October 30.
Bombardier (BBD) is up 1.56 per cent and is trading at 32 cents per share at 10:10am EDT.