Bombardier announced its strategic decision to focus on business aviation selling the transportation division to Alstom. This will accelerate deleveraging but only in part since its debt amounts to $9.3 billion.
From now on, Bombardier will exclusively focus on business aviation. The Canadian company has just signed a MoU the railway giant company Alstom for the sale of its transportation division. The transaction worth $4.5 billion will help Bombardier with its deleveraging procedure, further reducing the $9.3 billion of debt. “Today marks an exciting new chapter for Bombardier. Going forward, we will focus all our capital, energy and resources on accelerating growth and driving margin expansion in our market-leading $7.0 billion business aircraft franchise. With a stronger balance sheet after the completion of this transaction, an industry-leading portfolio of products, a strong backlog, and a rapidly growing aftermarket business, we will compete in this market from a position of strength,” said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc.
For the past two years, Bombardier has sold or is selling all of its interests in commercial aviation, to be able to repay its debts. The latter are mainly due to the exorbitant development costs of the CSeries program. The program was renamed A220 after Airbus acquired a majority stake in 2018. On February 12, 2020, Airbus finally took over remaining 31% stake of the program.
Ultimately, Bombardier will solely keep the Global, Challenger and Learjet business jet families and focus on the growing maintenance with supports 4,800 aircraft worldwide.