Home » BLOG » Bombardier Inc likely to spin off CSeries if government ‘Bailout 3.0’ approved, analyst says

Bombardier Inc likely to spin off CSeries if government ‘Bailout 3.0’ approved, analyst says

Analyst Turan Quettawala estimates that Bombardier shares could rise to $1.75 - about 35 per cent above their current value - if the CSeries is hived off.

Bombardier Inc. might be able to unload most the CSeries to the federal and Quebec governments if “Bailout 3.0” qualifies, prompting Scotiabank to upgrade the company’s shares.

Bombardier has asked the federal government for US$1 billion, matching the contribution produced by the Quebec government within the fall. If the company’s wish is granted, it’s likely the troubled CSeries jet program will be spun out into a separate entity that’ll be split evenly between your company and the two levels of government, said analyst Turan Quettawala.

“We have written extensively about why we believe the CSeries is very unlikely to include positive value to Bombardier’s equity,” he wrote in a note to clients.

“As such, if Bombardier can sell 66 percent from the CSeries towards the government for US$2 billion, that implies some value creation.”

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