Bombardier to Sell Water-Bomber Plane Program
June 20 2016 - 3:20PM
Dow Jones News
Bombardier Inc. said Monday it would sell its water-bomber plane
program to British Columbia's Viking Air Ltd. so it could focus on
its core business jet, commercial aircraft and rail-transportation
operations.
Terms of the sale, which is expected to close in the next few
months, weren't disclosed.
"This transaction supports our goal of rebuilding a clear path
to profitable earnings growth and cash generation," said Alain
Bellemare, chief executive of the Montreal-based plane and train
maker.
Bombardier has focused much of its attention in recent years on
its new CSeries passenger-jet program, and earlier this year
secured a landmark order for up to 125 of its single-aisle jets
from Delta Air Lines Inc. Still, the CSeries program has faced
major cost overruns and long delays and left the company with a
hefty debt load that it is working to pare.
Since October, Bombardier has raised $2.5 billion after agreeing
to sell almost half its stake in the CSeries program to the Quebec
government, and selling a stake in its train-making operations to a
Quebec pension fund. It is also seeking financial aid from Canada's
federal government.
The company said its decision to sell the Amphibious Aircraft
program to Viking Air, which makes Twin Otter aircraft, came after
"careful deliberation and a rigorous analysis." Bombardier said it
hasn't produced any aircraft under the program since December.
Around 50 employees of the program will be transferred to other
parts of the company, Bombardier said.
The Amphibious Aircraft program includes the Bombardier CL-415
water bomber and its different versions, as well as earlier
versions of the aircraft.
"The Bombardier 415 is the aviation industry's benchmark
amphibious aircraft and the backbone of firefighting missions
around the globe," Viking Air said in a separate release. The deal
includes the manufacturing rights for all versions of Bombardier's
amphibious aircraft, plus product support, parts and service for
the fleet of around 170 water bombers in service, Viking Air
said.
Write to Judy McKinnon at judy.mckinnon@wsj.com
(END) Dow Jones Newswires
June 20, 2016 15:05 ET (19:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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