Exclusive: Bombardier rail IPO pushed back further into 2016

Fri Oct 16, 2015 6:03pm EDT
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By Arno Schuetze, John Tilak and Euan Rocha

FRANKFURT/TORONTO (Reuters) - Bombardier Inc's (BBDb.TO: Quote) plans to sell a minority stake in its rail unit via an initial public offering in Germany have been put on the back burner and any listing may now only occur in the second quarter of next year, said four sources familiar with the matter.

With Bombardier running a dual-track process on the asset, the sale of a minority stake to a single entity or consortium is emerging as a more viable option, said the sources, who were not authorized to publicly discuss the matter.

A Bombardier spokeswoman said on Friday the company still intends to file its IPO documentation before the end of 2015, but that the timing of any IPO would be contingent on market conditions.

In May, Bombardier had said it was aiming to launch an IPO in the fourth quarter. In June, the head of the rail unit said the company would be ready to list in the fourth quarter, but may do it a bit later if conditions were not ideal.

In Germany, two large corporations recently had to trim their IPO plans in volatile markets, while another pulled an IPO altogether.

Two of the sources said Bombardier has received plenty of interest in the rail asset from foreign strategic buyers, along with private equity and pension funds. An IPO or sale would help it raise cash to tackle cost overruns in its CSeries jet program.

"The resources are all directed towards a stake sale now," said one Canadian-based source.

Bombardier turned down an offer from China's Beijing Infrastructure Investment [BEINF.UL] to buy up to 100 percent of the prized rail unit, Reuters reported last month.   Continued...

Visitors walk past to a Bombardier ZEFIRO 380 high speed trains at the Innotrans 'International Trade Fair for Transport Technology - Innovative Components, Vehicles, Systems' in Berlin September 21, 2010.  REUTERS/Fabrizio Bensch