UPDATE 5-Bombardier shakes up leadership, seeks $2 bln as CSeries costs jump

Thu Feb 12, 2015 3:56pm EST
 
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* Chairman Laurent Beaudoin to retire

* Beaudoin's son, Pierre, to step down as CEO

* Pierre Beaudoin takes over as chairman (Adds comments from fund managers)

By Allison Martell and Swetha Gopinath

Feb 12 (Reuters) - Bombardier Inc stunned investors on Thursday by replacing its chief executive, suspending dividends, and saying it needs to raise $2 billion in new debt and equity as it revealed more cost overruns in its long-delayed CSeries passenger jet program.

Shares in the Canadian plane and train maker sank more than 12 percent to C$2.65 on the news. The Montreal-based company, which is now testing the new CSeries jet after years of delays, had said just last month that it had enough liquidity to fund its development programs.

"From an investor perspective, you always hate to have a situation like this where a company bets its future on a product line," said Wendell Perkins, a senior managing director at Manulife Asset Management, which owns Bombardier stock.

"The successful run of the CSeries ... is still a big question mark."

Bombardier also reported a big quarterly loss, hurt by a $1.4 billion charge announced last month relating to its decision to suspend development of a new Learjet.   Continued...