Pension fund Caisse open to investing more in Bombardier
By Matt Scuffham
MONTREAL (Reuters) - Canada's second-largest pension fund, Caisse de depot et placement du Quebec, said it was open to further investment in Bombardier Inc (BBDb.TO: Quote) after reporting strong returns in 2015.
Quebec's public pension fund manager agreed to buy a 30 percent stake in Bombardier's rail business for $1.5 billion in November, providing a bigger cash cushion for Bombardier's planemaking unit.
Asked if the Caisse would invest further in Bombardier Inc, Caisse Chief Executive Michael Sabia said: "Are we open to the idea of increasing our position? Yes. Are we going to increase our level of investment in Bombardier Inc very soon? Probably not. We have an important investment in a subsidiary of Bombardier. For now, that represents significant exposure."
Bombardier has struggled to win new orders for its C Series plane with some potential clients looking for more certainty about its financial health before placing orders. It remains in talks over possible federal aid.
Sabia said federal aid would make Bombardier more attractive to investors by providing that certainty.
"If those risks get reduced I think you'll probably see some change in the valuation of the company so I think that's the catalyst. It's a risk reduction story."
The company last week received the first order in 16 months for its CSeries jets, sending its shares higher and overshadowing news of lower-than-expected results and plans to cut 7,000 jobs.
Sabia backed Chief Executive Alain Bellemare to turn the business around and said he should be given time. Continued...