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Bombardier has entered into a definitive agreement for a $1 billion US investment by the Government of Québec in a newly created limited partnership.
It will be called the C Series Aircraft Limited Partnership (the “CSALP”), to which the assets, liabilities and obligations of the C Series aircraft program will be transferred.
“We are delighted to officially welcome the Government of Québec as an equity partner in the C Series program,” said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc. “We are grateful for the confidence the people and Government of Québec have in the C Series. Their investment will accelerate the momentum we’ve created, strengthen customer confidence in the aircraft and provide Bombardier with the financial flexibility needed to compete and win.”
The disbursement of the investment is expected to occur in two $500 million US payments, on June 30, 2016 and on September 1, 2016. Upon completion of the investment, the CSALP will be 50.5%-owned by Bombardier and 49.5%-owned by the Government of Québec, through its mandatary, Investissement Québec.
Bombardier will maintain operational control of the C Series program and consolidate its financial results. Fred Cromer will serve as President of the CSALP, and continue in his current role.
The Board of Directors of CSALP will consist of five directors, three of whom will be proposed by Bombardier and two by the Government of Québec. Daniel Johnson will serve as chairman of the Board of Directors of the CSALP.
As previously reported, the investment has been approved by Bombardier’s Board of Directors and the Cabinet of the Government of Québec and remains conditional upon the satisfaction of other customary conditions. The $1 billion US investment will be used entirely for cash flow purposes of the CSALP.
As part of the agreement, the strategic, financial and operational headquarters for the CSALP, along with the assembly, manufacturing, engineering services and research and development activities of the CSALP, will remain in the Province of Québec for at least 20 years.