3 Min Read
* Company signs framework agreement with France's SNCF
* First firm order worth 800 mln euros for 80 trains
* Framework agreement could amount to 860 regional trains
* Bombardier shares up 2.6 percent in Toronto (Updates closing share price; in U.S. dollars unless noted)
TORONTO, Feb 24 (Reuters) - Bombardier Inc (BBDb.TO) has signed a framework agreement with French National Railways that could add up to around 8 billion euros ($10.85 billion) for a total of 860 regional express trains.
Bombardier said on Wednesday it has an initial firm order with SNCF, France's publicly owned railway, worth about 800 million euros, for 80 of the double-deck electric trains.
The first deliveries are scheduled for June 2013 and will continue through December 2015.
Montreal-based Bombardier, the world's No. 1 trainmaker, said it would build all the vehicles at it facility in Crespin in northern France.
The new trains will replace old rolling stock and boost SNCF's regional network, with traffic expected to continue to grow strongly.
"Although it was somewhat expected that Bombardier would eventually be awarded this first portion of the contract, we think it is likely that the company should see further follow on orders toward the (8 billion euro) French buildout," said Rama Bondada, an analyst with Macquarie Securities in New York, in a note to clients.
"We think this news reinforces our view that contract wins at Bombardier Transportation will drive the stock in the near term as aerospace weakness persists."
Bombardier's stock rose 14 Canadian cents, or 2.6 percent, to C$5.48 on the Toronto Stock Exchange on Wednesday.
The announcement last November that Bombardier was in exclusive negotiations SNCF was seen as a major coup for the company, as France is home to one of Bombardier's major competitors, Alstom (ALSO.PA).
Bombardier is also the world's No. 3 civil aircraft maker. Its aerospace division has been hard hit lately as airlines have struggled and the market for business jets stalled during the recession.
But the company's transportation division has benefited from government infrastructure spending and it has been steadily building its order backlog.
Bombardier, through its Chinese joint venture, signed a $4 billion contract in September to supply high-speed trains to China, and earlier in the year it inked a $1.1 billion deal in Canada to supply street cars to Toronto.
Several other multibillion-dollar tenders are expected in Britain, Germany, Canada and other developed markets, according to analysts.
The United States is also making a big push toward high-speed rail, with President Barack Obama announcing $8 billion in grants in January to help develop an ambitious rail plan. [ID:nN28102851]
$1=$1.05 Canadian Reporting by John McCrank; editing by Rob Wilson