Bombardier aerostructures sale comes into question, dragging shares to new low

MONTREAL — Bombardier Inc. shares fell to a new low Tuesday after Spirit AeroSystems said some closing conditions on its planned acquisition of Bombardier's aerostructures business remain unmet, injecting a degree of uncertainty into the deal.

The US$500-million sale of facilities in Belfast and Morocco forms a key part of Bombardier's shift from a commercial plane-and-train maker to a pure-play manufacturer of private jets.

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The deal is also critical to buoying the Montreal-based company's balance sheet, which is currently weighed down by more than US$9 billion in debt.

Spirit AeroSystems says the agreement will automatically terminate if conditions are not satisfied by Oct. 31.

The Kansas-based company says the conditions include an absence of legal barriers, receipt of third-party consents and no major adverse changes to the business, which includes fuselage and wing factories.

Bombardier shares fell by one cent or three per cent to 38 cents in mid-afternoon trading on the Toronto Stock Exchange, a new 25-year-low for the Quebec mainstay.

Analyst Walter Spracklin of RBC Dominion Securities says he believes Bombardier has time to fulfil the closing conditions, but that the deal is less likely to close than previously expected.

The agreement was initially anticipated to wrap up in May of this year.

This report by The Canadian Press was first published Sept. 22, 2020.

Companies in this story: (TSX:BBD.B)

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