VV
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 12:21 pm

VV wrote:
Here is the plan.

1. Transform the partnership into a limited liability corporation
2. Airbus acquired BBD's part at 500 million dollars
3. The new company *Airbus Canada Inc." increases its capital by creating new shares offered at NYSE and TSE.

The dilution of capital puts Airbus' stake at 45℅, Investissement Quebec at 10℅ and finally 45% public/institution investors.

The new autonomous company will start with 3 billion dollars of cash to ramp up production.



Someone said it would be 500 million dollars.

This deal is a little bit more than 500 million dollars, but as a bonus Airbus (via Stelia) got more than Bombardier's stake in Airbus Canada Limited Partnership.

The guy was not too wrong in his estimation.
 
NorbertoChez
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 12:36 pm

How many does the A220-500 series suppose to sit? Is it 150 or more?

Because looking at the press release from Airbus: "Ranging from 100 to 150 seats, the A220 is highly complementary to Airbus’ existing single-aisle aircraft portfolio, which focuses on the higher end of the single-aisle business (150-240 seats)."

It seems to be that the 220 is under 150 and current Airbus products are for 150 and above.
 
Amiga500
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 12:44 pm

MIflyer12 wrote:
BBD spent, what $6 Billion in development costs? It has now divested its ~32% stake in that, and its 32% share of all A220 profits going forward not just the current backlog of ~600, for USD 591 million and not having to fund further shortfalls. That is how poor they see prospects for even long-term profitability.


That is how poor their outlook is.

BBD are completely and utterly f-word-ed.

Trains will end up being sold for peanuts and then they don't have the cash to sustain bizjets.


BBD will cease to exist (at least as we know it) within 5 years.
 
Amiga500
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 12:49 pm

Jomar777 wrote:
So why oh why we only hear about the A220-500 on A.net? Why has Airbus already not jumped on the bandwagon and started offering the extension?


I'll leave the other as a difference of opinion.

But with regards this:

Image

https://simpleflying.com/air-baltic-a220-stretch/
Air Baltic CEO Martin Gauss wrote:
Simple Flying caught up with CEO Martin Gauss at the IATA Wings of Change Europe conference to ask him just that. He told us,

“We very much support this idea. Airbus is quoted as saying they could think about a larger A220 in the future. We think this aircraft is really efficient, so a stretched version of it could be even more efficient, because you would be able to have more seats.”


https://www.ch-aviation.com/portal/news ... more-a220s
Korean Air CEO Walter Cho wrote:
Cho also said that he believed that the carrier's fleet of ten A220-300s was too small. He hinted that Korean Air may be interested in ordering more of the Airbus regional jets but only once "some glitches" were fixed. The airline could also become a customer for the yet-to-be-announced stretched version of the A220, the so-called "A220-500".


Not only within Anet.
 
leghorn
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 12:50 pm

MIflyer12 wrote:
scbriml wrote:
That is how poor they see prospects for even long-term profitability.

No, that is the actions of a company which can't get loans at below 7% if at all because they are over-indebted.
 
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 12:50 pm

Keep in mind Bombardier's outlook is net of their expenses for the current program. Airbus just saw their prospects for the A220 go up.
 
Amiga500
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 12:51 pm

VV wrote:
VV wrote:
Here is the plan.

1. Transform the partnership into a limited liability corporation
2. Airbus acquired BBD's part at 500 million dollars
3. The new company *Airbus Canada Inc." increases its capital by creating new shares offered at NYSE and TSE.

The dilution of capital puts Airbus' stake at 45℅, Investissement Quebec at 10℅ and finally 45% public/institution investors.

The new autonomous company will start with 3 billion dollars of cash to ramp up production.



Someone said it would be 500 million dollars.

This deal is a little bit more than 500 million dollars, but as a bonus Airbus (via Stelia) got more than Bombardier's stake in Airbus Canada Limited Partnership.

The guy was not too wrong in his estimation.


Broken clocks are right twice a day.
 
StTim
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 12:58 pm

MIflyer12 wrote:
scbriml wrote:

Meanwhile, congrats to Airbus on picking up 75% of the program for peanuts.


BBD spent, what $6 Billion in development costs? It has now divested its ~32% stake in that, and its 32% share of all A220 profits going forward not just the current backlog of ~600, for USD 591 million and not having to fund further shortfalls. That is how poor they see prospects for even long-term profitability.


It is a firesale for BBD as they cannot afford to support the program through to profitability.

This is great news for the A220 as that lack of BBD cash is no longer a hinderance. Airbus can now invest where they see the return and not need to argue/wait for BBD to be able to support it.
 
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 1:53 pm

Amiga500 wrote:
MIflyer12 wrote:
BBD spent, what $6 Billion in development costs? It has now divested its ~32% stake in that, and its 32% share of all A220 profits going forward not just the current backlog of ~600, for USD 591 million and not having to fund further shortfalls. That is how poor they see prospects for even long-term profitability.


That is how poor their outlook is.

BBD are completely and utterly f-word-ed.

Trains will end up being sold for peanuts and then they don't have the cash to sustain bizjets.


BBD will cease to exist (at least as we know it) within 5 years.


Seems there will be nothing left of Bombardier if they sell the train division to Alstom and business jet division to Textron as speculated.
 
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 2:16 pm

Cash positive around 2025:

https://leehamnews.com/2020/02/13/airbu ... of-quebec/

Airbus today said the A220 will be profitable when the production reaches 150 aircraft per year which, is expected around 2025.
 
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 2:29 pm

VV wrote:
Amiga500 wrote:
VV wrote:


Someone said it would be 500 million dollars.

This deal is a little bit more than 500 million dollars, but as a bonus Airbus (via Stelia) got more than Bombardier's stake in Airbus Canada Limited Partnership.

The guy was not too wrong in his estimation.


Broken clocks are right twice a day.


Why aren't other broken clock right even ONCE?


'cos they are digital clocks with broken displays. Any competent engineer would know that intuitively.
 
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william
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 3:04 pm

StTim wrote:
MIflyer12 wrote:
scbriml wrote:

Meanwhile, congrats to Airbus on picking up 75% of the program for peanuts.


BBD spent, what $6 Billion in development costs? It has now divested its ~32% stake in that, and its 32% share of all A220 profits going forward not just the current backlog of ~600, for USD 591 million and not having to fund further shortfalls. That is how poor they see prospects for even long-term profitability.


It is a firesale for BBD as they cannot afford to support the program through to profitability.

This is great news for the A220 as that lack of BBD cash is no longer a hinderance. Airbus can now invest where they see the return and not need to argue/wait for BBD to be able to support it.


https://www.nytimes.com/reuters/2020/02 ... lstom.html

Alstom in advanced talks to buy BBD 's rail division. Whoever is the last person leaving Bombardier's HQ, please turn the lights off.
 
dstblj52
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 3:19 pm

Etheereal wrote:
eisenbach wrote:
...The only thing I don't understand is, why should someone be condemned, when he wants to sell products to a low price or even with loss (with the goal to increase market share)? I find this law very strange, especially as the US is not a communist/socialist country :-). This destroys free marked & innovation and will always help companies with strong political ties.


You're missing the point. When you're selling at a loss, you force others to either sell at a loss too and/or go bankrupt, just to be able to match.

Its a very simple rule market that some countries do not understand. What you ask is called Dumping, Its not allowed by the WTO, and China is the prime example of a country that often does it to gain your so called market share.

Here's more info from it on the WTO page: https://www.wto.org/english/tratop_e/ad ... info_e.htm

Your right the problem is that everyone in aviation sell the first few planes of the line at a loss
 
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Re: Official: Bombardier sells remaining stake in A220 program

Thu Feb 13, 2020 3:58 pm

Francoflier wrote:
Nicely played by Quebec, who managed to increase their share at no cost (not sure how... Did they take on some of the debt?) and secured local jobs. This was their main goal all along.

Congrats to Airbus. $591 million for an aircraft that cost $7b to develop is a good deal, I would say... It will of course cost them a lot more in additional investment, but still.


Res bolded, I suspect that Quebec and Airbus looked and reasonable values of the Quebec investment and current state of the value of the 220 and agreed that 25% was about right.
Buffet: the airline business...has eaten up capital...like..no other (business)
 
Amiga500
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Re: Official: Bombardier sells remaining stake in A220 program

Thu Feb 13, 2020 4:01 pm

frmrCapCadet wrote:
Francoflier wrote:
Nicely played by Quebec, who managed to increase their share at no cost (not sure how... Did they take on some of the debt?) and secured local jobs. This was their main goal all along.

Congrats to Airbus. $591 million for an aircraft that cost $7b to develop is a good deal, I would say... It will of course cost them a lot more in additional investment, but still.


Res bolded, I suspect that Quebec and Airbus looked and reasonable values of the Quebec investment and current state of the value of the 220 and agreed that 25% was about right.


Say what now?

How does what appears to be a transaction between BBD and AI involve IQ?

If you go to the stock market to buy shares, do you gift a percentage of them to a 3rd party?!? If so, can I be that 3rd party please.
 
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 4:29 pm

When one partner buys out one of the two other partners relative values are affected by that buyout. It is complicated by any number of factors. Airbus and Quebec seem satisfied and the deal took place rather quickly, supporting my guess. (but then neither of us has inside information).
Buffet: the airline business...has eaten up capital...like..no other (business)
 
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Re: Official: Bombardier sells remaining stake in A220 program

Thu Feb 13, 2020 4:32 pm

Francoflier wrote:
Nicely played by Quebec, who managed to increase their share at no cost (not sure how... Did they take on some of the debt?) and secured local jobs. This was their main goal all along.

Congrats to Airbus. $591 million for an aircraft that cost $7b to develop is a good deal, I would say... It will of course cost them a lot more in additional investment, but still.

I too can't figure out the free gift to IQ, unless it is a payoff to make the deal fly politically. If so, well played by IQ!

Jungleneer wrote:
We do not know the full picture yet. For example, what were the liabilities that came together with this purchase.

https://www.theglobeandmail.com/busines ... remaining/ gives a good summation:

Airbus will pay Bombardier about US$600-million to increase its share in the venture to 75 per cent from just over 50 per cent and relieve Bombardier of further capital commitments in the program worth US$700-million, the companies said in a statement Thursday. The Quebec government will boost its share in the venture to 25 per cent from about 16 per cent for no cash consideration.

One could look at this and say Airbus gave $600m cash and $700m concessions to gain 25% of the program.

This values 1/4th of the program at $1.1B or the whole program at $4.4B at this point in time.

PepeTheFrog wrote:
Cash positive around 2025:

https://leehamnews.com/2020/02/13/airbu ... of-quebec/

Airbus today said the A220 will be profitable when the production reaches 150 aircraft per year which, is expected around 2025.

Yes, that has to be kept in mind. The $4.4B valuation is for a program that still needs a lot of investment and a lot of guidance and five years time before it becomes profitable.

PepeTheFrog wrote:
Also part of the deal: Airbus will be able to buy the reaming 25% from Quebec in 2026:

https://www.flightglobal.com/programmes ... 22.article

The European airframer has confirmed that, under the revised ownership agreement for Airbus Canada Limited Partnership, the Investissement Quebec share will be redeemable to Airbus from 2026, three years later than the previous 2023 timeframe.


That's just a matter of time before Airbus gets the entire program.

Nice timing for IQ, just as the program is making money and the future upside of the program is well understood.

It is strange that it will be in Airbus's best interest to limit the success of the program to minimize its eventual buyout price.

It can do whatever it wants since it has control of the BoD.

I presume since the partnership will no longer have BBD's cash coming in that Airbus will have to loan it money or the partnership will have to secure its own financing on the market.
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Re: Official: Bombardier sells remaining stake in A220 program

Thu Feb 13, 2020 5:04 pm

Revelation wrote:
Francoflier wrote:
Nicely played by Quebec, who managed to increase their share at no cost (not sure how... Did they take on some of the debt?) and secured local jobs. This was their main goal all along.

Congrats to Airbus. $591 million for an aircraft that cost $7b to develop is a good deal, I would say... It will of course cost them a lot more in additional investment, but still.

I too can't figure out the free gift to IQ, unless it is a payoff to make the deal fly politically. If so, well played by IQ!

Jungleneer wrote:
We do not know the full picture yet. For example, what were the liabilities that came together with this purchase.

https://www.theglobeandmail.com/busines ... remaining/ gives a good summation:

Airbus will pay Bombardier about US$600-million to increase its share in the venture to 75 per cent from just over 50 per cent and relieve Bombardier of further capital commitments in the program worth US$700-million, the companies said in a statement Thursday. The Quebec government will boost its share in the venture to 25 per cent from about 16 per cent for no cash consideration.

One could look at this and say Airbus gave $600m cash and $700m concessions to gain 25% of the program.

This values 1/4th of the program at $1.1B or the whole program at $4.4B at this point in time.

PepeTheFrog wrote:
Cash positive around 2025:

https://leehamnews.com/2020/02/13/airbu ... of-quebec/

Airbus today said the A220 will be profitable when the production reaches 150 aircraft per year which, is expected around 2025.

Yes, that has to be kept in mind. The $4.4B valuation is for a program that still needs a lot of investment and a lot of guidance and five years time before it becomes profitable.

PepeTheFrog wrote:
Also part of the deal: Airbus will be able to buy the reaming 25% from Quebec in 2026:

https://www.flightglobal.com/programmes ... 22.article

The European airframer has confirmed that, under the revised ownership agreement for Airbus Canada Limited Partnership, the Investissement Quebec share will be redeemable to Airbus from 2026, three years later than the previous 2023 timeframe.


That's just a matter of time before Airbus gets the entire program.

Nice timing for IQ, just as the program is making money and the future upside of the program is well understood.

It is strange that it will be in Airbus's best interest to limit the success of the program to minimize its eventual buyout price.

It can do whatever it wants since it has control of the BoD.

I presume since the partnership will no longer have BBD's cash coming in that Airbus will have to loan it money or the partnership will have to secure its own financing on the market.


Buyout of IQ can maybe also done via job commitments by Airbus. For example; for 25% of the share we will double the workforce in Quebec or that work goes to Mobile.
 
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 5:33 pm

Can we please leave the dumping case out of the discussion. This has been discussed in due course in other threads. Thanks.
 
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 5:40 pm

This is a great deal for all three parties.
Airbus pays $591 for a multi billion investment.
Bombardier gets some survival cash.
IQ gets exactly what they wanted with future upside.

This is great news for the A220. This should help sales. I type this knowing the aviation sales market is in a bit of flux (Coronavirus).

This helps Pratt too. ;)

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Re: Official: Bombardier sells remaining stake in A220 program

Thu Feb 13, 2020 5:47 pm

Revelation wrote:
https://www.theglobeandmail.com/busines ... remaining/ gives a good summation:

Airbus will pay Bombardier about US$600-million to increase its share in the venture to 75 per cent from just over 50 per cent and relieve Bombardier of further capital commitments in the program worth US$700-million, the companies said in a statement Thursday. The Quebec government will boost its share in the venture to 25 per cent from about 16 per cent for no cash consideration.

One could look at this and say Airbus gave $600m cash and $700m concessions to gain 25% of the program.

This values 1/4th of the program at $1.1B or the whole program at $4.4B at this point in time.

Oops, pre-coffee math!

$600m + $700m = $1.3B; $1.3B * 4 = $5.2B

$5.2B should be a ball park figure for the program's valuation at this point in time.

It would be interesting if Airbus chose to float it as a stand alone entity on the stock market.
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 5:50 pm

lightsaber wrote:
This helps Pratt too. ;)

If only their engines would stop having uncontained failures, sigh.

Ref: viewtopic.php?t=1441001
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 5:54 pm

This is along with Bombardier selling its rail division to Alstom. What will be left?
 
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 6:06 pm

aemoreira1981 wrote:
This is along with Bombardier selling its rail division to Alstom. What will be left?

The business aircrafts. That will not be sold to Textron. (Unless the rail division sale doesn't happen)
 
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 6:09 pm

Jomar777 wrote:
Can you substantiate your statement that Airbus makes a loss on every A220 they are building? Not disputing but wondering why it would be so?


They are still in production learning, increasing output, ...
107 built in 7..8 years ( do we count from the first frame done or from EIS ( 4 years ago )? )
What I got out of information provided seems to hint at another 2 years to turn the tide.
Murphy is an optimist
 
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 6:23 pm

WIederling wrote:
Jomar777 wrote:
Can you substantiate your statement that Airbus makes a loss on every A220 they are building? Not disputing but wondering why it would be so?

They are still in production learning, increasing output, ...
107 built in 7..8 years ( do we count from the first frame done or from EIS ( 4 years ago )? )
What I got out of information provided seems to hint at another 2 years to turn the tide.

Actually we have a better source, Airbus itself:

PepeTheFrog wrote:
Cash positive around 2025:

https://leehamnews.com/2020/02/13/airbu ... of-quebec/

Airbus today said the A220 will be profitable when the production reaches 150 aircraft per year which, is expected around 2025.

Seems BBD was right when they said costs were higher and positive ROI would take longer than expected.

Also the linked article says:

The Bombardier commitment also contained a program loss coverage of a maximum of $610m until 2021.

So it appears many of us were not evaluating BBD's requirements with regard to investing in the program correctly.

It also explains why BBD was so hot to sell out: they were on the hook to borrow that much money at unacceptably high interest rates and had no hope of any payback till 2025 or so.
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 6:35 pm

Amiga500 wrote:
VV wrote:
Amiga500 wrote:

Broken clocks are right twice a day.


Why aren't other broken clock right even ONCE?


'cos they are digital clocks with broken displays. Any competent engineer would know that intuitively.


I really DO NOT understand you stuff with "broken clocks".

Would you please elaborate?
 
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 7:36 pm

Return to profitability in 2025 is years later than previously thought. And with Quebec's share standing until 2026, is there a piece of information we don't have?

Could this deal contain information that is not public? Profitability in 2025 could mean further investments needed before that. Like expanding production lines or launching an A220-500?
 
JonesNL
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 7:38 pm

Revelation wrote:
Actually we have a better source, Airbus itself:

PepeTheFrog wrote:
Cash positive around 2025:

https://leehamnews.com/2020/02/13/airbu ... of-quebec/

Airbus today said the A220 will be profitable when the production reaches 150 aircraft per year which, is expected around 2025.


That’s what I would say after I just got the steal of the century. Downplay the future outlook while you know that you will be cashing much sooner. Underpromise and overdeliver. They have nothing to gain by touting that they got an steal and are expecting massive profits. They have much more to lose by showing all their cards.

Or it’s just Occam’s razor and I am overthinking things...
 
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 7:45 pm

VV wrote:
I really DO NOT understand you stuff with "broken clocks".
Would you please elaborate?

Une interprétation "possible" est qu'une horloge "figée" / en panne (à 10h10 par exemple) donnera toujours l'heure juste deux fois par jour... (à 10h10 le matin, et à 10h10 le soir par exemple).

But hey, you definitely understood very well that interpretation, didn't you? :D
 
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Re: Official: Bombardier sells remaining stake in A220 program

Thu Feb 13, 2020 7:51 pm

Revelation wrote:
Revelation wrote:
https://www.theglobeandmail.com/busines ... remaining/ gives a good summation:

Airbus will pay Bombardier about US$600-million to increase its share in the venture to 75 per cent from just over 50 per cent and relieve Bombardier of further capital commitments in the program worth US$700-million, the companies said in a statement Thursday. The Quebec government will boost its share in the venture to 25 per cent from about 16 per cent for no cash consideration.

One could look at this and say Airbus gave $600m cash and $700m concessions to gain 25% of the program.

This values 1/4th of the program at $1.1B or the whole program at $4.4B at this point in time.

Oops, pre-coffee math!

$600m + $700m = $1.3B; $1.3B * 4 = $5.2B

$5.2B should be a ball park figure for the program's valuation at this point in time.

It would be interesting if Airbus chose to float it as a stand alone entity on the stock market.


There are a few ways to challenge that math. (Oh, the creativity of investment bankers!)

The one that is most fun: IQ got an additional 8.5% stake for $0, so the business is valued at $0. That's a big gap: $0 to $5.2 Billion.

I'm not sure investment avoidance by BBD fairly has the same evaluation as cash paid by Airbus. Among other reasons: newly invested monies would be creating a business worth more (to ramp up production, for example).
 
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 7:52 pm

One thing that could be interesting, is to compare the 25% shares in BBD to the amount that IQ invested. If we consider that the value of theses 25 % is roughly equal to the shares Airbus just got, we should have a good idea.
When UK was in it wanted a lot of opt-outs, now it is out it wants opt-ins
 
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 7:54 pm

Re the inital agreement: BBD was on the hook for 700M$, but how much was actually paid?
"When I find out I was wrong, I change my mind. What do you do?" -attributed to John Maynard Keynes
 
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 8:03 pm

JetBuddy wrote:
Return to profitability in 2025 is years later than previously thought. And with Quebec's share standing until 2026, is there a piece of information we don't have?

Could this deal contain information that is not public? Profitability in 2025 could mean further investments needed before that. Like expanding production lines or launching an A220-500?

My guess would be that they are now having to book the cost of building the early frames sold on cheap prices against the actual cost of building them and are seeing the corresponding shift in the trend lines.

I think ROI will look pretty bad till they get past the early deals BBD made under duress.

I doubt it matters to Airbus, they are in it for the long term and can fund it out of pocket change and get a nice paper loss for tax purposes (ref: our Airbus results thread telling us Airbus generated EUR 3.5B in positive cash flow last year).

BBD on the other hand needed to get the millstone off its neck.
Wake up to find out that you are the eyes of the world
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Wake now, discover that you are the song that the morning brings
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TObound
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 8:04 pm

Remember when I said IQ wouldn't exit unless they got the right price?

Prediction: The launch of the 225 will move up. Development costs shared with IQ. Buyout price increases. But so does the long term value of every single A220 slot and A320NEO slot.
Last edited by TObound on Thu Feb 13, 2020 8:09 pm, edited 1 time in total.
 
Aircellist
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 8:09 pm

About IQ: yesterday I heard over the radio that finance minister Pierre Fitzgibbon hopes that Quebec will about recover what it spent with the CSeries… I was driving, sorry if the reference is a bit hazy, but I believe it was at Radio-Canada's "Le 15-18". Did not sound overconfident at all.
"When I find out I was wrong, I change my mind. What do you do?" -attributed to John Maynard Keynes
 
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reidar76
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 8:35 pm

Airbus has always had the governments of France, Germany and Spain as investors (now about 25%). Having the Government of Quebec as an investor in Airbus Canada (25%), is an excellent long term solution. When governments invest they often take a passive role, and they are stable and reliable owners. The only thing they are concerned about is growth in the form of more local jobs, continued innovation and economic stability. Dividends isn't that important.

It seems like some people here thinks that Airbus must or should buy out the Government of Quebec. Why should they?
Last edited by reidar76 on Thu Feb 13, 2020 8:36 pm, edited 1 time in total.
 
Babyshark
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 8:35 pm

TObound wrote:
Remember when I said IQ wouldn't exit unless they got the right price?

Prediction: The launch of the 225 will move up. Development costs shared with IQ. Buyout price increases. But so does the long term value of every single A220 slot and A320NEO slot.


Better Prediction: The A220-500 will never happen.
 
TObound
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 8:43 pm

Babyshark wrote:
TObound wrote:
Remember when I said IQ wouldn't exit unless they got the right price?

Prediction: The launch of the 225 will move up. Development costs shared with IQ. Buyout price increases. But so does the long term value of every single A220 slot and A320NEO slot.


Better Prediction: The A220-500 will never happen.


At least we've moved on from your crazy fantasies about Airbus wanting to shut down the program......
 
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ikolkyo
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 8:49 pm

Sheesh I wonder BBDs end game is. It seems they are fully leaving the Rail and Aerospace business.
 
HaulSudson
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 8:53 pm

reidar76 wrote:
It seems like some people here thinks that Airbus must or should buy out the Government of Quebec. Why should they?


Because they have an agreement/contract for doing exactly that: redeem Quebec's stake in 2026.

Whether Airbus effectively exercises their call option on the Quebec share, is probably up to them.

Possibly Quebec also has a put option to stick the share to Airbus at a predetermined price - in order to keep all noses in the same direction.

Similar to BBD's put option, which was exercised earlier than planned, i.e. today.
 
HaulSudson
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 9:00 pm

Babyshark wrote:
TObound wrote:
Remember when I said IQ wouldn't exit unless they got the right price?

Prediction: The launch of the 225 will move up. Development costs shared with IQ. Buyout price increases. But so does the long term value of every single A220 slot and A320NEO slot.


Better Prediction: The A220-500 will never happen.



Oh, did you dream it again on two of your flights?
 
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Revelation
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 9:10 pm

TObound wrote:
Remember when I said IQ wouldn't exit unless they got the right price?

Prediction: The launch of the 225 will move up. Development costs shared with IQ. Buyout price increases. But so does the long term value of every single A220 slot and A320NEO slot.

Every slot is sold through the period where IQ can be bought out. Why would IQ want the company dissipating whatever incoming revenue they have on more R&D work? I can see why Airbus would want such a thing, though. It'd depress the current value of the partnership right up to the point where it can buy out IQ, if they time it out correctly.

FWIW, Airbus's CEO said they would not invest in a stretch till the enterprise is economically viable, and now we know it's on a trend line for break even in 2025. I doubt this advances the A225 timeline at all.

HaulSudson wrote:
reidar76 wrote:
It seems like some people here thinks that Airbus must or should buy out the Government of Quebec. Why should they?


Because they have an agreement/contract for doing exactly that: redeem Quebec's stake in 2026.

Whether Airbus effectively exercises their call option on the Quebec share, is probably up to them.

Possibly Quebec also has a put option to stick the share to Airbus at a predetermined price - in order to keep all noses in the same direction.

Similar to BBD's put option, which was exercised earlier than planned, i.e. today.

Clearly whatever put option that was constructed in 2018 was not what was exercised today.

IMO it shows that all of these agreements are in effect statements of intentions, ones that can be discarded and rewritten as needs arise.

Airbus thought it was in its benefit to let BBD off the hook, so it was willing to discard the old agreement and put a new one into effect.

IQ sounds like a fairly passive investor, so chances are pretty good they will just go with the flow.

It's not like they have much choice, Airbus has had control of the BoD going back to 2018.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
Canuck600
Posts: 254
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 9:16 pm

If Quebec can't get back what they spent on the program.they will face a huge backlash from the Quebec taxpayers. The government of Canada is in the same situation.

I might be reading it wrong but I think a lot of people are not grasping that Bombardier's need for guaranteed cash now far outweighs any potential profit they would get in the future.
 
VV
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 9:31 pm

ExMilitaryEng wrote:
VV wrote:
I really DO NOT understand you stuff with "broken clocks".
Would you please elaborate?

Une interprétation "possible" est qu'une horloge "figée" / en panne (à 10h10 par exemple) donnera toujours l'heure juste deux fois par jour... (à 10h10 le matin, et à 10h10 le soir par exemple).

But hey, you definitely understood very well that interpretation, didn't you? :D


Sorry, I do not understand it in the context of this thread.

I said Bombardier would get only 500 million from the sale of its stake and my estimate is damn close to the reality.
This event happens only once, so what the hell is the fuss about "a broken clock is right twice a day"???

This sale is one off event, so there will never be any other $ 500 million of Bombardier stake bought by Airbus. What the heck is this story about a clock being right twice a day???
 
oldJoe
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 9:47 pm

Babyshark wrote:
TObound wrote:
Remember when I said IQ wouldn't exit unless they got the right price?

Prediction: The launch of the 225 will move up. Development costs shared with IQ. Buyout price increases. But so does the long term value of every single A220 slot and A320NEO slot.


Better Prediction: The A220-500 will never happen.


No, simply wishful thinking. If Airbus anounce the A220-500 today they will have a problem inhouse, but the bigger problem I can see is with the Max !
 
GalaxyFlyer
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 9:50 pm

ikolkyo wrote:
Sheesh I wonder BBDs end game is. It seems they are fully leaving the Rail and Aerospace business.


They delivered 142 bizjets vs 33 airliners last year; they started out in bizjets, they’re going back to bizjets. Supporting 3,000 in-production planes, building 150+ planes a year and sharing the large cabin business with Gulfstream is enough. Delusions of being a major airliner builder are gone, as is the RJ delusion.
 
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ikolkyo
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 10:08 pm

GalaxyFlyer wrote:
ikolkyo wrote:
Sheesh I wonder BBDs end game is. It seems they are fully leaving the Rail and Aerospace business.


They delivered 142 bizjets vs 33 airliners last year; they started out in bizjets, they’re going back to bizjets. Supporting 3,000 in-production planes, building 150+ planes a year and sharing the large cabin business with Gulfstream is enough. Delusions of being a major airliner builder are gone, as is the RJ delusion.


Well it wasn’t a delusion, they were a big player in the market. If Learjet also ends up going, BBD as a whole would be a massive shell of their former self. Sad to see.
 
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ADent
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 10:20 pm

Jomar777 wrote:
So why oh why we only hear about the A220-500 on A.net? Why has Airbus already not jumped on the bandwagon and started offering the extension?

Air France did mention it once.

Airbus needs to get costs down and production up before offering new versions.

This buyout of BBD buyout clears up the investment future quite a bit.

Presumably Airbus and IQ have a plan, so Airbus doesn’t need to wait until 2026 or negotiate deals for factory upgrades and product development investments.
 
GalaxyFlyer
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 10:21 pm

But the market was illusion...RJs were an answer to a question being less frequently asked. 50% of the market was created by scope clauses and the effects of 9/11. Yes, a shell of itself in 2002, but massively bigger than in 1989 when selling 17 planes was cause for champagne toasts.

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