Quebec signals it is open to foreign investor in Bombardier
By Allison Lampert and Allison Martell
MONTREAL/TORONTO (Reuters) - Quebec signaled it is open to foreign investment in Bombardier Inc (BBDb.TO: Quote) on Wednesday, after the Canadian plane and train manufacturer failed to sell its CSeries jet program to Airbus, potentially inviting a politically difficult deal with a Chinese investor.
The failed talks were the latest blow to Bombardier, which is saddled with debt as the CSeries program limps toward commercial service next year, years late and billions of dollars over budget, jeopardizing Bombardier's dream of entering the aviation big league on its own terms.
Asked about the possibility of foreign investment, Quebec's Economy Minister Jacques Daoust hinted that a majority stake held by overseas interests would not be unusual.
"Look at the ownership of Quebec crown jewels that are listed on the stock exchange," he told reporters in Quebec City. "You are going to realize that they are not majority-held by Quebecers."
Daoust said the most important issue for him was that the company's head office remained in Montreal.
Shares in Bombardier fell 13 percent to C$1.53 on the Toronto Stock Exchange on Wednesday, a day after Bombardier and Airbus said talks between them had ended. Reuters on Tuesday reported Bombardier had offered to sell a majority stake in the CSeries to its larger rival.
"We think Bombardier approaching Airbus is negative as it could imply serious funding or CSeries sales issues," Canaccord analyst David Tyerman wrote in a note to clients.
The company has been struggling to sell the narrow-body jet and it has not announced a new firm order in more than a year. Continued...