Bombardier set for massive cash infusion from Quebec, says report
by Ross Marowits, The Canadian Press
Analyst Benoit Poirier said he suspects the province could make a $1 billion direct participation in Bombardier
MONTREAL—Bombardier’s shares got a lift Oct. 28 after a published report suggested the Quebec government will be making a financial contribution to the embattled transportation giant.
The Quebec-based company’s stock gained more than three per cent in early trading on the Toronto Stock Exchange.
The Montreal La Presse report says the provincial government’s intervention will be announced Oct. 29, following the release of Bombardier’s third-quarter results.
It wasn’t clear whether the province or the province’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 suspects the province could either make a $1 billion to $2 billion direct participation in Bombardier Transportation or provide favourable financing to CSeries customers. He doubts it will come through equity financing given the 62 per cent drop in the company’s stock price this year.
The company’s B shares were at $1.50 early Wednesday. They had cratered in August to a low of $1.03 after hitting their 52-week high of $4.43 in early December.
The governments of Quebec, Canada and Britain have previously made sizable financial contributions to Bombardier to help develop and sell the CSeries, the 110- to 160-seat commercial jet that is set to enter into service next year following a two year delay.
Quebec isn’t the only government partner concerned about Bombardier.
Northern Ireland’s economy minister was meeting with senior company officials as part of a five-day mission to Montreal and Toronto.