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Bombardier (TSX: BBD.A, BBD.B, BBD.PR.B, BBD.PR.D, BBD.PR.C) announced today that it has entered into an agreement with a syndicate of underwriters, led by Credit Suisse Securities (Canada), Inc., National Bank Financial Inc., UBS Securities Canada Inc. and TD Securities Inc. (collectively, the Underwriters) under which they have agreed to purchase on a bought deal basis from Bombardier 168,000,000 Class B shares (subordinate voting) of Bombardier (the Class B Subordinate Voting Shares) at a purchase price of Cdn$3.80 per Class B Subordinate Voting Share (the Offering). Bombardier has also granted the Underwriters an option to purchase up to an additional 25,200,000 Class B Subordinate Voting Shares at any time up to 30 days after closing of the Offering. Closing of the Offering is expected to occur on or about March 23, 2018, subject to customary closing conditions, including receipt of stock exchange approval.
The Offering will result in gross proceeds of Cdn$638.4 million to Bombardier (or approximately Cdn$734.1 million if the Underwriters’ overallotment option is exercised in full). Bombardier intends to use the net proceeds of the Offering to supplement its working capital and for general corporate purposes, consistent with Bombardier’s continued proactive approach to capital management. As it executes its five-year turnaround plan, the net proceeds from the Offering will increase Bombardier’s cash position, thereby building further operational flexibility and re-equitizing the balance sheet. Bombardier’s turnaround plan remains on track, focusing on the execution of growth initiatives, with a goal to create long-term shareholder value.
A short form prospectus relating to the Offering will be filed with securities regulatory authorities in each of the provinces of Canada.
This press release does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction nor will there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction. This press release does not constitute an offer to sell or the solicitation to buy securities in the United States. The securities mentioned herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
With over 69,500 employees across four business segments, Bombardier is a global leader in the transportation industry, creating innovative and game-changing planes and trains. Our products and services provide world-class transportation experiences that set new standards in passenger comfort, energy efficiency, reliability and safety.
Headquartered in Montreal, Canada, Bombardier has production and engineering sites in 28 countries across the segments of Transportation, Business Aircraft, Commercial Aircraft and Aerostructures and Engineering Services. Bombardier shares are traded on the Toronto Stock Exchange (BBD). In the fiscal year ended December 31, 2017, Bombardier posted revenues of $16.2 billion US. News and information are available at bombardier.com or follow us on Twitter @Bombardier.
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This press release includes forward-looking statements, which may involve, but are not limited to: statements with respect to the Corporation’s objectives, guidance, targets, goals, priorities, market and strategies, financial position, beliefs, prospects, plans, expectations, anticipations, estimates and intentions; general economic and business outlook, prospects and trends of an industry; expected growth in demand for products and services; product development, including projected design, characteristics, capacity or performance; expected or scheduled entry-into-service of products and services, orders, deliveries, testing, lead times, certifications and project execution in general; competitive position; the expected impact of the legislative and regulatory environment and legal proceedings on the Corporation’s business and operations; available liquidities and ongoing review of strategic and financial alternatives; the completion, anticipated timing of the transaction with Airbus SE (“Airbus”) described in the “Strategic Partnership” section in the management’s discussion and analysis of financial condition and results of operations of the Corporation for the year ended December 31, 2017 (“Annual MD&A”), and the receipt of regulatory and other approvals required with respect to this transaction and the anticipated timing thereof; the governance, funding and liquidity of C Series Aircraft Limited Partnership (“CSALP”); the impact and expected benefits of the transaction with Airbus on the Corporation’s operations, infrastructure, capabilities, development, growth and other opportunities, geographic reach, scale, footprint, financial condition, access to capital and overall strategy; the impact of such transaction on the Corporation’s balance sheet and liquidity position; as well as the closing of the Offering, timing and use of proceeds thereof.
Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”, “will”, “shall”, “can”, “expect”, “estimate”, “intend”, “anticipate”, “plan”, “foresee”, “believe”, “continue”, “maintain” or “align”, the negative of these terms, variations of them or similar terminology. Forward-looking statements are presented for the purpose of assisting investors and others in understanding certain key elements of the Corporation’s current objectives, strategic priorities, expectations and plans, and in obtaining a better understanding of the Corporation’s business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes.
By their nature, forward-looking statements require management to make assumptions and are subject to important known and unknown risks and uncertainties, which may cause Bombardier’s actual results in future periods to differ materially from forecast results set forth in forward-looking statements. While management considers these assumptions to be reasonable and appropriate based on information currently available, there is risk that they may not be accurate. The assumptions underlying the forward-looking statements made in this press release in relation to the transaction with Airbus discussed in the “Strategic Partnership” section in the Corporation’s Annual MD&A, include the following material assumptions: the satisfaction of all conditions of closing and the successful completion of the transaction within the anticipated timeframe, including receipt of regulatory (including antitrust) and other approvals; the fulfillment and performance by each party of its obligations pursuant to the transaction agreement and future commercial agreements and absence of significant inefficiencies and other issues in connection therewith; the realization of the anticipated benefits and synergies of the transaction in the timeframe anticipated; the Corporation’s ability to continue with its current funding plan of CSALP and to fund, if required, any cash shortfalls; adequacy of cash planning and management and project funding; and the accuracy of the Corporation’s assessment of anticipated growth drivers and sector trends. The assumptions underlying the forward-looking statements made in this press release in relation to the Offering include the following material assumptions: the satisfaction of all conditions of closing and the successful completion of the Offering within the anticipated timeframe, including receipt of stock exchange approval; and that no event will occur which would allow the Underwriters to terminate their obligations under the underwriting agreement. For additional information with respect to the assumptions underlying the forward-looking statements made in this press release, refer to the “Strategic Priorities” and “Guidance and forward-looking statements” sections in the Corporation’s Annual MD&A.
With respect to the transaction with Airbus discussed specifically in the “Strategic Partnership” section in the Corporation’s Annual MD&A, certain factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, risks associated with the failure to receive or delay in receiving regulatory (including antitrust) or other approvals or otherwise satisfy the conditions to the completion of the transaction or delay in completing the transaction and uncertainty regarding the length of time required to complete the transaction; changes in the terms of the transaction; the failure by either party to satisfy and perform its obligations pursuant to the transaction agreement and future commercial agreements and/or significant inefficiencies and other issues arising in connection therewith; the impact of the announcement of the transaction on the Corporation’s relationships with third parties, including commercial counterparties, employees and competitors, strategic relationships, operating results and businesses generally; the failure to realize, in the timeframe anticipated or at all, the anticipated benefits and synergies of the transaction; the Corporation’s ability to continue with its current funding plan of CSALP and to fund, if required, the cash shortfalls; inadequacy of cash planning and management and project funding; and, in relation to the Offering, include the following risks: the failure to satisfy the conditions to the completion of the Offering or delay in completing the Offering and the funds thereof not being available to the Corporation in the time frame anticipated or at all; and the occurrence of an event which would allow the Underwriters to terminate their obligations under the underwriting agreement.
Certain other factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to: risks associated with general economic conditions, risks associated with the Corporation’s business environment (such as risks associated with “Brexit”, the financial condition of the airline industry, business aircraft customers, and the rail industry; trade policy (including potential changes to or the termination of the existing North American Free Trade Agreement between Canada, the U.S. and Mexico currently in discussion); increased competition; political instability and force majeure events or natural disasters), operational risks (such as risks related to developing new products and services; development of new business; the certification and homologation of products and services; fixed-price and fixed-term commitments and production and project execution; pressures on cash flows and capital expenditures based on project-cycle fluctuations and seasonality; the Corporation’s ability to successfully implement and execute its strategy and transformation plan; doing business with partners; product performance warranty and casualty claim losses; regulatory and legal proceedings; environmental, health and safety risks; dependence on certain customers and suppliers; human resources; reliance on information systems; reliance on and protection of intellectual property rights; and adequacy of insurance coverage), financing risks (such as risks related to liquidity and access to capital markets; retirement benefit plan risk; exposure to credit risk; substantial existing debt and interest payment requirements; certain restrictive debt covenants and minimum cash levels; financing support provided for the benefit of certain customers and reliance on government support), market risks (such as risks related to foreign currency fluctuations; changing interest rates; decreases in residual values; increases in commodity prices; and inflation rate fluctuations). For more details, see the “Risks and uncertainties” section in “Other” in the Corporation’s Annual MD&A.
Readers are cautioned that the foregoing list of factors that may affect future growth, results and performance is not exhaustive and undue reliance should not be placed on forward-looking statements. Other risks and uncertainties not presently known to the Corporation or that the Corporation presently believes are not material could also cause actual results or events to differ materially from those expressed or implied in the Corporation’s forward-looking statements. In addition, there can be no assurance that the proposed transaction with Airbus will occur or that the anticipated strategic benefits and operational, competitive and cost synergies will be realized in their entirety, in part or at all. The forward-looking statements set forth herein reflect management’s expectations as at the date of this press release and are subject to change after such date. Unless otherwise required by applicable securities laws, the Corporation expressly disclaims any intention, and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.