UPDATE 5-Bombardier to get $1 bln Quebec investment, eyes on federal talks
* Quebec to hold 49.5 pct stake in new limited partnership
* Investment to be made in two installments of $500 mln
* Quebec can seek same terms as any future federal deal (Adds Moody's rating change and Bombardier response)
By Allison Lampert
MONTREAL, June 23 (Reuters) - Planemaker Bombardier Inc said on Thursday it signed a long-expected deal with Quebec for the Canadian province to invest $1 billion in its CSeries aircraft program, which has struggled with years of delays and cost overruns.
The agreement leaves the Montreal-based manufacturer free to focus on talks with Canada's federal government over possible investment, a deal which is proving much harder to pull off.
Quebec and Bombardier want the federal government to match the province's investment in the narrowbody jet program. But negotiations have dragged on, with sources close to the talks saying Prime Minister Justin Trudeau's Liberal government wants changes to the plane-and-train maker's dual-class share structure.
Quebec Transport Minister Jacques Daoust told Reuters in an interview the deal contains a clause that would allow the province to match the terms of any federal investment. He also said he believes a deal with the federal government was possible despite protracted talks.
Should federal investment not materialize, Daoust said the province would not rule out a foreign investor in the CSeries. But he said Quebec would retain veto rights and conditions already negotiated by the province, like keeping Bombardier's head office in Quebec, would have to be respected. Continued...