Rumors Bombardier trains division for sale refuted

GMT 22:23 2015 Friday ,10 April

Arab Today, arab today Rumors Bombardier trains division for sale refuted

Bombardier high speed train on display at transportation technology fair in Berlin
Montreal - AFP

A Quebec government official on Friday quashed speculation that Canadian manufacturer Bombardier is preparing to sell off its lucrative trains division.

Jacques Daoust, economic minister for the Canadian province of Quebec, where the company is based, said he had spoken with Bombardier chief executive Pierre Beaudoin and was assured the trains unit was not for sale.

"I received the confirmation this morning that the Transportation division is not for sale," Daoust said in a statement.

In an interview with public broadcaster Radio-Canada, however, he left open the possibility of Bombardier taking part in "a merger with an equal, an acquisition or doing nothing at all."

The earlier speculation had pushed up Bombardier's share price, as investors reacted to unconfirmed reports that Bombardier was in talks with banks about the possible sale of part or all of its transportation division, which builds commuter and regional trains.

The company's stock gained Can$0.18 (US$0.14) or 7.3 percent in morning trading in Toronto from the previous night's close, reaching a high of Can$2.79 (US$2.21) before slipping back.

The stock closed at Can$2.64 (US$2.10), for a net gain of 1.5 percent.

The company posted massive losses last year related to the development of its first medium-sized jetliner.

The CSeries aircraft marks Bombardier's entry into market space dominated by Airbus and Boeing, but has been plagued by costly delays.

A new chief executive was hired in February to reorganize the company.

At the time, Bombardier said it expected another tough year in the aircraft business, but continued strength in train sales.

Bombardier spokeswoman Isabelle Rondeau declined to comment on the latest rumors, but reminded that all options were put on the table back in February to return to profitability.

"We're considering all sorts of strategic options," she said, adding however, "We're not considering a fire sale."

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