Under the agreement, Bombardier and la Caisse will sell their interests in Bombardier Transportation to Alstom on the basis of an enterprise value of $8.4 billion (€7.09 billion), reflecting a $350 million (€295.56 million) price reduction from the previously announced memorandum of understanding, 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 agreement. After deducting la Caisse’s equity position of $2.2 billion, Bombardier expects net proceeds of roughly $4 billion. This amount includes $585 million (€494.01 million) of Alstom shares for a fixed subscription price of €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,” Éric Martel, president and CEO of Bombardier, said. “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 agreement 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 Q1/21, subject to the completion of the remaining regulatory reviews and other customary closing conditions, as well as Alstom shareholders’ approval at the company’s upcoming Oct. 29 extraordinary shareholders’ meeting.
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