Minister of the Economy, Innovation and Exports Jacques Daoust announced the signing of a historic partnership with Bombardier to form a limited partnership to complete the C Series program.
After investing one billion USD, the Québec government will hold a 49.5% stake in the new company.
“With this strategic investment, we will play a leading role in developing an ultra-modern jet that has already been the focus of significant international attention. The entire community will reap the rewards of the new partnership. This move will also keep C Series operations here in Québec for at least another 20 years,” said Minister Daoust.
C Series planes are the gold standard in the 100- to 150-seat market. They deliver a number of advantages with respect to fuel consumption, payload, range, and airfield performance. They are also the quietest jets on the market. They are on track for certification and Bombardier has over 600 signed commitments and firm orders.
Bombardier’s contribution for 50.5% of the shares will include the transfer to the new limited partnership of 1,700 employees, vendor contracts, and clients along with the assets and intellectual property required to continue to pursue the design, manufacturing, and marketing of the twin-engine CS100 and CS300 planes.
The investment will come from the Economic Development Fund and managed by Investissement Québec. Two instalments of US$500 million each will be paid on April 1 and June 30, 2016. The government will receive 200 million stock warrants–100 million per instalment. Each warrant will entitle the government to buy a Class B share in Bombardier at an exercise price in USD equivalent to CA$2.21 per share for a five-year period.
The investment, the first of its kind in the aerospace industry, fits with the government’s new business model of acting as a partner rather than a granting agency. This is a win-win relationship because the Québec government is coming in as an investor and, as such, can expect an appropriate return on its investment.
“Today we are seizing a unique opportunity to join forces with a company that epitomizes engineering innovation in Québec. For the Québec government, it is critical that the aircraft industry continue to develop and prosper here. Our workers have the expertise, talent, and creativity needed to bring the C series to new heights,” concluded Minister Daoust.