Bombardier says funding is intact despite jet delays
Bombardier Inc. will not have to raise additional funds this year after delaying delivery of its CSeries narrow-body plane for a fourth time, chief executive officer Pierre Beaudoin said.
“We feel that we have the liquidity to complete our programs,” Beaudoin said Wednesday in Davos at the World Economic Forum. “We don’t need to issue debt or equity.”
Bombardier, which is relying on deliveries of the CSeries and new business jets to improve its balance sheet, has suffered scheduling setbacksonseveraldevelopment programs. The manufacturer delayed its CSeries jetliner again on Jan. 16, saying the aircraft won’t enter commercial service until late next year instead of 2014 because it needs more time for tests.
The smaller CS100 model of the CSeries is now set to debut in the second half of 2015, with the larger CS300 to follow six months later. Beaudoin said the company will disclose the extra costs associated with a delayed CSeries handover in conjunction with its earnings announcement next month.
The cost of hedging against losses on Bombardier’s debt climbedWednesday.Five-year credit-default swap contracts on Bombardier debt widened about 9.7 basis points to about 299 basis points as of 4:09 p.m. in New York, the most among members of Canada’s benchmark Standard & Poor’s/TSX
“We feel that we have the liquidity to complete our programs.”
BOMBARDIER CEO PIERRE BEAUDOIN Composite Index for which there are actively traded contracts, according to prices compiled by Bloomberg.
Bombardier’s widely traded Class B shares fell 1 per cent to $3.91 at 4 p.m. on the Toronto Stock Exchange. That was lowest closing price since April, according to data compiled by Bloomberg, and pushed the company’s yearto-date decline to 15 per cent.
The maiden flight of Bombardier’s biggest-ever jet was already pushed back three times. Bad weather has slowed trials, and program costs have climbed to about $3.9 billion, 15 per cent more than projected.
The program “is doing very well,” Beaudoin said Wednesday, adding that he is “disappointed that we are taking a little bit more time.”
The new schedule is “quite reliable” although risk remains as testing continues on an “extremely complex product,” Beaudoin said. “It is important to enter into service with great reliability.”
The CSeries competes for orders with the smallest Airbus Group NV and Boeing Co. single-aisle models, the workhorses of the global airline fleet.