Canada’s federal government will provide Bombardier C$ 372.5 million ($ 282 million) over four years to help fund development of Bombardier’s Global 7000 business jet and CSeries airliner, the government announces.
The “repayable contribution” from Ottawa is substantially less than the US$ 1 billion investment that Bombardier had been seeking to help fund the company as it continues the costly development projects.
The latest cash injection follows an investment of $ 1 billion in CSeries by Quebec’s provincial government, and a $ 1.5 billion investment by Canadian pension fund CPDQ in Bombardier’s rail division. Canada’s federal government also provided $ 350 million in repayable contributions to Bombardier in 2005 to launch the CSeries project.
Though the investment likely takes some pressure off Bombardier, the company has substantial loan payments due in the coming years, including $ 1.4 billion due in 2018, according to a November report from rating agency Moody’s.
“This initiative by the government of Canada will fund research and development for the new Global 7000 business jet and ongoing activities related to the development of the company’s CSeries aircraft.,” say a media release from Innovation, Science and Economic Development Canada, the government’s economic development agency.
The C$ 372.5 million remains subject to final agreements and will be paid “over four years, in a number of installments”, the government says.
It adds that the “majority” of the C$ 372.5 million will be allocated to the Global 7000 through a partnership called the Strategic Aerospace and Defence Initiative (SADI).
Contributions to the CSeries programme will be made through the “government’s existing contribution agreements with Bombardier”, the release says.
“The repayable contributions announced today will help to ensure that Canada remains at the centre of Bombardier’s research and development activities,” Bombardier chief executive Alain Bellemare said in a government media release.