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Bombardier breakup may be best way to gain liftoff, some analysts say

  • With shares down 40% in the past year and debt more than twice its market value, struggling Bombardier (OTCQX:BDRBF) needs to sell some of its businesses and find a focus fast, analysts say.
  • New CEO Alain Bellemare said this week he is leaving all options open, which has some analysts predicting asset sales that could range from the Learjet division for as much as $750M to a stake in the rail business, which had 2014 revenue of more than $9B.
  • Selling off pieces could reassure investors that Bombardier can handle rising interest payments and make a start in cleaning up its debt, analysts say.
  • Bombardier’s controlling family would need to back any such plans and may not feel the need to consider a breakup right now, but analysts tell Bloomberg that Textron (NYSE:TXT) and Embraer (NYSE:ERJ) may be drawn to Learjet, while Alstom (OTCPK:ALSMY) could be a potential suitor if Bombardier offers a stake in its rail unit.

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