Bombardier to get cash injection from Quebec government
By The Canadian Press
Bombardier’s shares got a lift Wednesday after a published report suggested the Quebec government will be making a financial contribution to the embattled transportation giant.
By The Canadian Press
The Quebec-based company’s stock gained strength on the Toronto Stock Exchange as the trading day progressed — up 11 per cent in the early afternoon — but remained worth far less than a year ago.
The Montreal La Presse report says the provincial government’s intervention will be announced Thursday following the release of Bombardier’s third-quarter results.
It wasn’t clear whether the province or Quebec’s biggest pension fund manager, the Caisse de depot, would buy Bombardier shares or make some other form of financial contribution.
Analyst Benoit Poirier of Desjardins Capital Markets said he doubts the province will make an equity investment in Bombardier Inc., given the 62 per cent drop in the company’s stock price this year.
Bombardier’s stock cratered in August to a low of $1.03 after hitting their 52-week high of $4.43 in early December. On Wednesday, the B shares were at $1.61 on Wednesday afternoon, up 11 per cent from the previous close
Poirier says he suspects the province could help Bombarider by investing $1 billion to $2 billion in the Bombardier Transportation rail division or by providing favourable financing to customers that buy Bombardier Aerospace CSeries planes.
Bombardier declined to comment on possible government actions and or on details of the financial report, which is scheduled to be released before markets open on Thursday.
Quebec, Canada and Britain have previously made sizable financial contributions to Bombardier to help develop and sell the CSeries, a 110- to 160-seat commercial jet. It’s now to enter into service next year — about two-years behind schedule.
Canada committed US$350 million, Quebec $117 million and Britain 180 million pounds.
The Quebec government also agreed in 2013 to provide $1 billion in financing help to buyers of the CSeries, joining a similar practice by the federal government.
Quebec isn’t the only government partner concerned about Bombardier.
Northern Ireland’s enterprise minister met with senior company officials as part of a five-day mission to Montreal and Toronto.
Jonathan Bell toured Bombardier’s Mirabel facility to see the assembly of the CSeries, which include wings made at its plant in Belfast.
“While I recognize that Bombardier faces challenges, the management team is confident these can be overcome and that more sales will follow. The relationship between Northern Ireland and Bombardier is a long standing, successful one; and it is a relationship that will continue to bear fruit in the future,” he said in a news release.
Meanwhile, Bombardier could learn later Wednesday whether the Toronto Transit Commission will sue the company over the late delivery of streetcars.