DALLAS: Bombardier Inc’s ill-fated foray into building jetliners may be nearing an end, and investors are applauding.
The company is in advanced talks to sell its stake in Airbus SE’s A220 programme to the European aerospace giant, the Wall Street Journal reported Friday.
A deal for Bombardier’s 34% holding in the venture could be reached as early as next week, the newspaper said, citing people familiar with the matter. Quebec, which owns 16% of the programme, would retain its stake.
Walking away from the A220 would close the book on Bombardier’s involvement in an aircraft programme in which the company invested more than US$6 billion amid a series of development delays and cost overruns.
Bombardier, creaking under heavy debt and struggling to sell the all-new single-aisle plane, ceded control of the programme to Airbus in 2018 while retaining a minority participation.
Financial terms of the Airbus-Bombardier deal couldn’t be learned, the Journal said. The talks could still fall apart and the outlines of any agreements could change, the newspaper said. Both companies are scheduled to report earnings Feb 13.
Bombardier climbed 4.5% to C$1.49 at 3.34pm in Toronto, reversing losses after the Journal’s story.
A sale of the company’s stake in the A220, which was originally known as the C Series, would also be a milestone for cash-strapped Bombardier as it weighs selling other key businesses in a potentially far-reaching revamp.
Saddled with a US$10 billion debt load, the Montreal-based company has held talks to combine its rail-equipment operation with France’s Alstom SA. It’s also exploring a sale of its private jet unit to Textron Inc, the Journal reported earlier this week.