Canada-based Bombardier said that it has signed a definitive sale and purchase agreement (SPA) with Alstom and the Caisse de dépôt et placement du Québec (“la Caisse”) for the sale of its transportation business to Alstom.
Under the SPA, Bombardier and la Caisse will sell their interests in Bombardier Transportation to Alstom on the basis of an enterprise value of $8.4 billion (EUR 7.15 billion), reflecting a $350 million (EUR300 million) price reduction from the previously announced Memorandum of Understanding (MOU), offset by the impact of a more favourable currency exchange rate.
Based on Bombardier Transportation’s current operational performance and market conditions, total proceeds after the deduction of debt-like items, transferred liabilities and estimated closing adjustments are expected to be $6.2 billion, based on the lower end of the range agreed to in the SPA.
After deducting la Caisse’s equity position of $2.2 billion, Bombardier expects net proceeds of approximately $4.0 billion. This amount includes $585 million (EUR 500 million) of Alstom shares for a fixed subscription price of EUR 47.50 per share, monetizable after a three-month lock-up post-closing.
“Today’s announcement marks a significant milestone towards achieving our near-term priorities and repositioning Bombardier as a pure-play business jet company,” said Éric Martel, President and Chief Executive Officer, Bombardier.
“The proceeds from this transaction will allow us to begin reshaping our capital structure and start addressing our balance sheet through debt paydown, so that we can achieve the full potential of our incredibly talented employees and our industry leading business jet portfolio.”
The signing of the SPA follows the completion of the required works council consultations. With regulatory approvals obtained from several jurisdictions, including the European Commission, the transaction closing is now expected in the first quarter of 2021. – TradeArabia News Service