08.05.15
Bombardier to sell a stake in its transport business
Bombardier says it is preparing an initial public offering (IPO) of a minority stake in its Transportation business, but will not sell off its rail division.
The Canada-headquartered corporation has been proactively reviewing its strategic options for its rail business, given the “ongoing industry consolidation”, and the IPO is expected to take place in the fourth quarter of this year, subject to market conditions.
There has been speculation in recent months that Bombardier Transportation, one of the world’s leaders in rail technology, could be sold as part of a strategic review.
In fact, it was rumoured that the two biggest train companies in China – CNR Corp and state-owned CSR Corp, currently in the process of merging – have been in discussions about a possible purchase of a controlling stake in Bombardier’s railway operation.
However, whilst reporting the first quarter results for Bombardier on 7 May, Alain Bellemare, the company’s president and CEO, said: “We are announcing today that we are preparing for an initial public offering of a minority stake in Bombardier Transportation.
“Let me be very clear, Bombardier Transportation is not for sale. We like this business and it will remain part of Bombardier Inc.”
After the IPO, Bombardier Transportation will continue to be controlled by Bombardier Inc. and consolidated in its financial results.
During the meeting, it was noted that Bombardier’s net income totalled $100m (£64.6m), or diluted earnings per share (EPS) of $0.05, compared to $115m (£74.3m) or $0.06 for the same period the previous year. Revenues totalled $4.4bn (£2.84bn) for the quarter, compared to $4.4bn (£2.84bn) for the same period last fiscal year.
(Image: c. Chris J Dixon)
The April/May 2015 edition of RTM is now available for FREE using the new RTM App, available on iOS and Android. Search ‘RTM Magazine’ in the App Store / Google Play.