Bombardier to pocket less than expected in sale of railway division to Alstom SA
The Montreal-based company says it expects to receive net proceeds of about US$4 billion
MONTREAL — Bombardier Inc. expects to pocket less than it first anticipated in the sale of its train division to French company Alstom SA.
The Montreal-based company says it expects to receive net proceeds of about US$4 billion (C$5.30 billion) including US$585 million in Alstom shares for a fixed subscription price of 47.50 euros per share.
The company, which reports in U.S. dollars, had said when the sale was announced in February that it expected net proceeds of between US$4.2 billion and US$4.5 billion.
Under a definitive agreement announced Sept. 16, Bombardier and the Caisse de depot et placement du Quebec will sell their interests in Bombardier Transportation to Alstom based on an enterprise value of 7.15 billion euros, a reduction of 300 million euros from the previously announced price.
However, due to a more favourable currency exchange rate than in February when the memorandum of understanding was announced, the enterprise value in U.S. dollars is now US$8.4 billion, up from US$8.2 billion.
Based on Bombardier Transportation’s current operational performance and market conditions, the company says after the deduction of debt-like items, transferred liabilities and estimated closing adjustments that total proceeds from the sale are expected to be US$6.2 billion before deducting the Caisse’s position, down from an expectation of about US$6.4 billion in February.